Trump suddenly announced an agreement with Indonesia, but did not disclose the details. Experts warn to be cautious that the so-called 'agreement' from the Trump administration may be an empty promise!
President Trump announced a deal with Indonesia but did not disclose the specific details. "Just reached a great deal that's beneficial for everyone with Indonesia. I negotiated directly with their respected president. Details to follow!!!" Trump stated in a post on Social Media on Tuesday.
Before this statement, Trump had just threatened to impose a 32% tariff on Indonesian Commodities starting August 1. Indonesia then sent its chief trade negotiator to the U.S. for urgent consultations with Trump's cabinet officials to reach an agreement.
According to the Indonesian Ministry of Economic Affairs, Coordinating Minister for Economic Affairs Airlangga Hartarto submitted several business cooperation proposals during meetings with U.S. Trade Representative Tai, Commerce Secretary Lutnick, and Treasury Secretary Bessent.
If the agreement materializes, it would be the fourth trade framework announced by the Trump administration following Vietnam and the United Kingdom.
However, analysts pointed out that the agreements announced by Trump often lack substantial content— the Vietnamese government was caught off guard when Trump suddenly announced that "Hanoi agreed to a 20% tariff," and sources indicate that the country is still striving to reduce the rate.
Indonesia carries "sweet benefits" to negotiate in the U.S.
Before Trump's post, Indonesia's chief negotiator Airlangga met with Tai and Lutnick in Washington this Wednesday. Both sides agreed to strengthen discussions in the next three weeks, and the Indonesian Ministry of Economic Affairs called this a "constructive progress."
Faced with a 32% tariff threat, Indonesia is trying to secure a tax rate lower than its Southeast Asian neighbors. Officials revealed that a memorandum of understanding signed with American companies this week could serve as a "lubricant" for negotiations, including an energy supply agreement between Indonesia's state-owned oil company and American Exxon Mobil, Chevron, and trader KDT Global Resources.
Previously, Trump sent a letter to Indonesia extending the negotiation deadline to August, but maintaining the tax increase plan. Indonesian Foreign Ministry spokesperson Harryo Limanesto admitted to being "surprised by the letter's content," but remained optimistic about reaching a final agreement. Erlangga stated that this would allow time for "technical and commercial discussions."
As the largest economy in Southeast Asia, Indonesia aims to reach favorable tax rates with important trading partners by promising to eliminate billions of dollars in trade surpluses, curb transshipment trade, and improve the business environment for American companies.
Last week, the Indonesian government announced plans to promote the signing of a $34 billion trade investment agreement with the United States, which includes $15.5 billion in energy procurement. On Monday, companies including Indonesia's state-owned oil company and Busana Outfits Group completed partial contracts with Cargill and the International Cotton Association.
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