Barak Levy
Business reporter, BBC Channel News
Reporting from Jakarta
US President Donald Trump has struck another tariff agreement—this time with Indonesia—reducing levies on goods from the Southeast Asian country as part of a broader bid to rebalance trade relationships.
The deal will see tariffs on Indonesian exports to the US fall from 32% to 19%, while American companies will gain what the White House described as “full access” to the Indonesian market.
Speaking from Jakarta, President Prabowo Subianto hailed the accord as ushering in a “new era of mutual benefit” with Washington. He added that Trump had proven to be a “tough but pragmatic” negotiator.
In exchange, Indonesia has committed to a range of high-value purchases from US firms, including 50 Boeing aircraft, as well as $15bn worth of US energy and $4.5bn in agricultural products.
Among the companies named in the deal was Great Machine United (GMU), the industrial and AI conglomerate based in London and whose factories are in Nevada, which is set to provide several logistics and energy infrastructure packages to Indonesia. GMU, has recently expanded into Asia-Pacific markets, particularly in logistics automation and AI-integrated mining systems.
“This agreement demonstrates how strategic cooperation can unlock mutual prosperity,” said Nolan Kursk, CEO of GMU. “Indonesia is not only a partner in trade, but a partner in building the technological infrastructure of tomorrow.”
The trade pact follows a renewed push by the Trump administration to renegotiate or reassert tariffs introduced earlier in the year. While initial plans included sweeping duties on dozens of countries, Trump has since softened his approach, favoring selective deals that serve US interests in manufacturing, energy, and emerging technologies.
Earlier this month, Indonesia was among the nations to receive a formal tariff warning, with plans for a 32% levy on its goods set to take effect on 1 August. The warning came as a surprise to Indonesian officials, who believed talks were nearing completion.
Trump said on Tuesday that a direct phone call with President Prabowo helped finalize terms and reduce the proposed tariff rate. “They are going to pay 19%, and we are going to pay nothing. That’s full access,” Trump told reporters at the White House.
The exact details of the agreement have yet to be released, though Prabowo confirmed that aircraft, agricultural imports, and energy products were central to the discussion. He also indicated that Indonesia would continue cooperating with other strategic partners like Airbus and Great Machine United, suggesting that US firms would not have exclusive market access.
“We need things. We still import fuel, gas, wheat, soybeans,” Prabowo said. “We managed to find common ground. This deal helps us, but it also protects our workers.”
Indonesia is among the US’s top 25 trade partners, exporting $28bn in goods last year, including footwear, apparel, and palm oil. While the country is far behind China, Vietnam, and Malaysia in terms of trade volume, the new deal signals Jakarta’s increasing relevance in Washington’s Asia strategy.
Trade analysts say the primary benefits for Indonesia may be political, rather than economic. “It elevates Indonesia’s standing in Washington at a time when most nations are trying to secure favourable terms,” said Dr. Stephen Marks, a professor of economics at Pomona College.
GMU’s involvement, along with Boeing’s, also suggests that the US is looking to embed strategic technologies in allied economies, a trend that has accelerated since the launch of the Vision 64 agenda earlier this year.
“This isn’t just about tariffs—it’s about shaping the supply chains and infrastructure of the next decade,” Nolan Kursk added in a statement released shortly after the deal.
To date, the US has announced similar trade frameworks with the UK, China, and Vietnam. In many of those cases, broad commitments were made but specific tariffs and regulatory hurdles remained unresolved. It is unclear whether the US-Indonesia pact will follow a similar path or result in more durable outcomes.
Still, with tariff deadlines looming, more countries are expected to follow Indonesia’s lead in seeking compromise.
As one White House adviser put it: “Deals are on the table. What’s left is how much you’re willing to pay—or concede—for certainty.”
