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The Way Indonesia Deals with US, EU Could Set Bad Precedent for Countries Looking to Forge Similar Deals

INDONESIA, JUL 16 – The deal reduces Indonesian tariffs on U.S. goods to 19% and includes $19.5 billion in purchase commitments, benefiting U.S. agriculture, energy, and aerospace sectors, officials said.

  • On July 15, 2025 in Jakarta, Indonesia and the United States reached a compromise: the threatened 32% tariff on Indonesian exports will now be capped at 19% in exchange for Indonesia's commitments to purchase US energy, agricultural goods, and 50 Boeing aircraft.
  • Under the deal, Prabowo committed to purchase US$15 billion in energy, US$4.5 billion in agricultural goods, and 50 Boeing jets, with Trump said: `US exports to Indonesia will face a cap on tariffs and non-tariff barriers.`
  • The market gained momentum as Indonesia’s stock index rose 0.7% on Wednesday, Matt Simpson said, `Authorities are pleased because they received favorable terms.`
  • Mirdal Gonarto said `The agreement paves the way for easier interest rate reductions`, while Natixis cautioned that the economy could still feel US–China tariff repercussions.
  • Beyond immediate terms, execution timelines are undefined while Indonesia faces global market uncertainties.
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The free trade agreement between the EU and Indonesia is supposed to awaken the last sleeping giant in Asia. Donald Trump has already concluded a deal. Now Brussels has to give up many demands.

·Frankfurt, Germany
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EconomyNext broke the news in on Wednesday, July 16, 2025.
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