Indonesia's $34 Billion Pact to Boost US Trade Ties

Indonesia plans to sign a $34 billion trade pact with the U.S. to enhance trade relations and address a 32% tariff barrier. This agreement, which will be finalized by July 7, aims to resolve trade imbalances and facilitate better negotiations, following Vietnam's recent tariff reduction deal.

Indonesia will sign a landmark $34 billion trade pact with U.S. business partners next week as part of efforts to strike a favorable trade deal with Washington. The signing, due by July 7, is aimed at increasing Indonesian purchases from the United States to facilitate healthier trade relations.

Currently, Jakarta is grappling with a steep 32% tariff on its goods in U.S. markets. In response, Indonesia has proposed boosting imports from the U.S. to negotiate better trade terms. Data from the U.S. Trade Representative indicate that in 2024, Indonesia experienced a goods trade surplus of $17.9 billion with the United States.

According to Indonesia's chief economic minister, Airlangga Hartarto, this new memorandum of understanding will direct substantial investments into the U.S., while also addressing the trade balance. Indonesia is hoping to secure a deal more favorable than Vietnam's recent agreement, where the U.S. lowered tariffs on Vietnamese exports.

(With inputs from agencies.)