President Donald Trump announced on Tuesday that the United States has reached a trade agreement with Indonesia, marking another step in his effort to renegotiate international trade terms and slash the U.S. trade deficit. The deal was struck just days before Trump’s threatened 32% tariff on Indonesian goods was set to take effect on August 1.
“Great deal, for everybody, just made with Indonesia. I dealt directly with their highly respected President. DETAILS TO FOLLOW!!!” Trump posted on Truth Social.
Indonesia’s trade volume with the U.S. reached nearly $40 billion in 2024, though it does not rank among the top 15 trading partners. The trade imbalance remains stark, with the U.S. running a nearly $18 billion deficit in goods. Top imports from Indonesia include palm oil, electronics, footwear, rubber, car tires, and frozen shrimp.
Susiwijono Moegiarso, an official from Indonesia’s Coordinating Ministry for Economic Affairs, confirmed that a joint U.S.-Indonesia statement is being prepared to outline the tariff terms, non-tariff arrangements, and other commercial commitments included in the deal.
The Indonesia agreement is part of Trump’s broader push to deliver what he has called “90 deals in 90 days.” In addition to Indonesia, the administration has secured framework agreements with the United Kingdom and Vietnam, and reached a temporary truce with China to delay the harshest tariffs amid ongoing negotiations.
But while Trump scored a win in Southeast Asia, tensions continue to escalate with the European Union. Brussels is preparing to impose retaliatory tariffs on up to €72 billion ($84.1 billion) worth of American goods if no deal is reached before Trump’s August 1 deadline. Trump has warned of a 30% tariff on E.U. imports unless trade terms shift significantly in America’s favor.
According to documents seen by Reuters, the E.U.’s potential countermeasures target a wide array of American exports, including Boeing aircraft, bourbon whiskey, agricultural goods, and auto parts. European Trade Commissioner Maros Sefcovic said that although negotiations are ongoing, E.U. nations are united in their readiness to respond decisively if Trump follows through with his tariffs.
“The resolve in that room was unprecedented,” Sefcovic said after a meeting of ministers in Brussels.
Despite global resistance, the Trump administration has made clear it will continue using tariffs as leverage to extract better trade deals. The latest agreement with Indonesia shows that some nations are willing to negotiate under pressure—while others, like the E.U., may be preparing for an all-out trade war.