President Donald Trump announced what he called a “landmark” trade agreement with Indonesia, opening up the Southeast Asian giant to American companies, while signing big deals for American aviation and energy companies along the way.
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What Happened: In a Truth Social post on Tuesday, Trump laid out the terms of the deal, which involves Indonesia buying $15 billion worth of U.S. energy and $4.5 billion in agricultural products, alongside 50 Boeing Co. (NYSE:BA) jets, “many of them 777s,” he says.
At the same time, he says, Indonesia will “pay a 19% tariff on all goods exported to the U.S.,” while American exports to the nation will be “tariff and non-tariff barrier FREE.”
According to Trump, the new agreement opens up “Indonesia's ENTIRE MARKET” with a total population of over 280 million people to U.S. ranchers, farmers, and fishermen for the first time.
The deal also targets China’s efforts to evade tariffs. “If there is any transshipment from a higher tariff country, then that tariff will be added on to the tariff that Indonesia is paying,” he said, without specifically mentioning China. Trump ended by thanking the people of Indonesia for their friendship and commitment to balancing “our trade deficit.”
Why It Matters: This comes just weeks after a trade pact was signed with Vietnam, which included a similar 40% tariff on transshipped goods, which again reflects U.S. efforts to isolate Chinese firms from global supply chains.
Recently, there have been growing concerns regarding China’s tariff-dodging efforts, as direct exports to the United States plunged 43% in May, while Vietnam and Indonesia saw big spurts in theirs. There was a 30% spike in Chinese exports routed through Vietnam, and a similar 25% increase via Indonesia.
Price Action: Shares of Boeing were down 0.22% on Tuesday, trading at $230.00, and are down another 0.10% after hours.
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