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Trump Sets 19% Indonesia Tariff; EU Threatens Retaliation

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Trump Sets 19% Indonesia Tariff; EU Threatens Retaliation/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ President Donald Trump imposed a new 19% tariff on Indonesian goods, escalating trade tensions ahead of an August deadline for wider tariffs. While Indonesia negotiates reciprocal terms, the European Union readies retaliation against $84 billion in US exports. Trump also hinted at new pharmaceutical tariffs and further levies on smaller nations.

Trump Sets 19% Indonesia Tariff; EU Threatens Retaliation.

Quick Looks

  • Trump imposes 19% tariff on Indonesian imports
  • Indonesia trade gap with US nearly $18 billion
  • EU readies tariffs on $84 billion in US goods
  • Trump eyes pharmaceutical tariffs by month-end
  • Indonesia pledges joint statement on tariff terms
  • Top US imports from Indonesia include palm oil, electronics
  • EU threatens retaliation if US raises tariffs August 1
  • Trump promises further tariff announcements for smaller nations

Deep Look

Trump Slaps 19% Tariff on Indonesia as EU Prepares Retaliation Over Trade Policies

WASHINGTON/BRUSSELS — President Donald Trump announced the United States will impose a 19% tariff on imports from Indonesia, marking the latest salvo in his aggressive trade agenda and putting additional pressure on global trade partners ahead of an August 1 deadline for sweeping new tariffs.

The announcement came as the European Union signaled it is preparing retaliatory tariffs on $84 billion worth of US goods if trade negotiations fail, further intensifying the possibility of a transatlantic trade conflict.

Details of the Indonesia Deal

Trump described the Indonesia pact as similar to a preliminary deal recently struck with Vietnam. The agreement features a flat 19% tariff on Indonesian exports to the US—nearly double the baseline 10% Trump imposed on most goods since April—while leaving US exports to Indonesia tariff-free.

“They are going to pay 19% and we are going to pay nothing … we will have full access into Indonesia,” Trump said Tuesday outside the Oval Office. He also claimed Indonesia committed to buying $15 billion in US energy products, $4.5 billion in American farm products, and 50 Boeing jets, though he did not specify a timeline for these purchases.

Trump previously threatened Indonesia with a 32% tariff, reflecting his strategy of using tariff threats as leverage in negotiations.

Indonesia’s trade with the US totaled nearly $40 billion in 2024, leaving the US with a goods trade deficit of close to $18 billion. US imports from Indonesia rose 4.8% last year, with top categories including palm oil, electronics, footwear, rubber, car tires, and frozen shrimp.

Indonesian official Susiwijono Moegiarso confirmed to Reuters that a joint statement detailing tariff terms and commercial arrangements is forthcoming.

Wider Global Implications

Trump hinted that letters to dozens of other countries would soon outline new tariffs, likely exceeding 10%, as part of his broader efforts to reduce the US trade deficit and push manufacturing back to domestic soil.

He also floated plans for new tariffs on pharmaceuticals imported into the US, starting at a lower rate to give companies time to shift production domestically, followed by steeper tariffs within a year.

Trump’s tariffs have roiled global markets and upended decades of trade liberalization. According to the Yale Budget Lab, average US tariff rates under Trump’s latest measures are projected to surge to 20.6%, the highest since 1933.

Despite his aggressive approach, Trump has secured only a handful of framework agreements since returning to the White House in January, falling short of his earlier promise of “90 deals in 90 days.” So far, deals have been announced with the United Kingdom, Vietnam, and a partial agreement with China.

EU Prepares Retaliation

Trump’s move on Indonesia coincided with warnings from the European Commission that it may impose tariffs on $84.1 billion worth of US goods if ongoing negotiations break down. The threatened EU tariffs would target products ranging from Boeing aircraft and bourbon whiskey to cars, chemicals, medical devices, and a variety of agricultural goods.

European officials remain alarmed by Trump’s threat to impose a 30% tariff on EU imports starting August 1—a step they say would devastate trade between two of the world’s largest economies.

A preliminary EU list outlines potential retaliatory tariffs on sectors including aviation, automotive, chemicals, precision instruments, and food and beverage products.

Global Trade at a Crossroads

The next few weeks could be pivotal for global trade dynamics. Trump’s aggressive tariff strategy has sparked concerns among economists about potential inflation, supply chain disruptions, and long-term impacts on US exporters.

As talks continue with partners like India and others, many nations are weighing whether to strike quick deals to avoid the worst of Trump’s tariffs or risk an escalating trade war.



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