India-US Trade Deal On Trump’s Radar? 'Talks Moving Along That Same Line,' Says US President After Indonesia Tariff Pact

In a major shift in global trade dynamics, US President Donald Trump on Tuesday announced a 19% tariff on goods imported from Indonesia under a new bilateral trade pact.

The deal, which Trump described as "just one of many coming," is part of his administration’s aggressive push to reset trade terms with countries running surpluses against the United States.

“They are going to pay 19% and we are going to pay nothing ... we will have full access into Indonesia, and we have a couple of those deals that are going to be announced,” Trump told reporters outside the Oval Office.

On his Truth Social platform, Trump added that Indonesia had agreed to buy $15 billion worth of U.S. energy products, $4.5 billion in farm goods, and 50 Boeing jets, though no time frame for the purchases was disclosed.

Tariff Threats to Other Countries, India in Focus
India, which shares a growing trade relationship with the U.S., may soon face a similar framework. “Talks with India are moving along that same line,” Trump said, indicating the deal would open access for American companies to the massive Indian market.

The statement has raised eyebrows in New Delhi, as officials monitor Washington’s increasingly protectionist stance ahead of the crucial August 1 tariff deadline.
Earlier this month, Trump sent letters to about two dozen nations—including Canada, Japan, Brazil, and India—threatening tariffs between 20% and 50%. For Indonesia specifically, Trump had threatened a 32% tariff before Tuesday’s announcement.

According to Trump, countries that fail to reach new agreements before August 1 could see US tariffs surge, with a baseline rate of 10% on most goods potentially rising dramatically.

Deal Mirrors Vietnam Pact, Others in Progress
The Indonesia agreement closely resembles a recently announced preliminary deal with Vietnam. Both include flat-rate tariffs on exports to the US, zero levies on U.S. goods exported to those countries, and penalties for transhipments, primarily targeting Chinese goods being rerouted via third countries.

Trump said the deal with Vietnam was “pretty well set” but did not reveal details. So far, the Trump administration has finalised framework deals with Vietnam, the United Kingdom, and China (interim), though it has fallen short of Trump’s earlier promise of “90 deals in 90 days.”

Indonesia, a relatively smaller US trade partner with total bilateral trade of nearly $40 billion in 2024, nonetheless saw its exports to the U.S. increase by 4.8% last year, while U.S. exports rose by 3.7%. The U.S. goods trade deficit with Indonesia currently stands at $18 billion.
 

Historic Spike in US Tariff Rates
According to the Yale Budget Lab, the average effective U.S. tariff rate will rise to 20.6% from the pre-Trump level of 2–3%, the highest since 1933. Even with some expected consumption shifts, the rate would remain elevated at 19.7%.

Trump’s approach has disrupted decades of trade liberalisation, rattled global markets, and sparked inflation concerns. His chaotic rollout and unpredictable threats have created uncertainty for trading partners worldwide.

EU Warns of Retaliation
As Trump shifts focus to Asia, tensions are also heating up in Europe. The European Union is preparing retaliatory tariffs on U.S. goods worth up to €72 billion ($84.1 billion), including Boeing aircraft, bourbon, cars, chemicals, and agricultural products, if trade talks with the U.S. break down.

Trump has threatened a 30% tariff on EU imports starting August 1—a move European officials have deemed “unacceptable” and potentially trade-ending.

Indonesian Officials Prepare Joint Statement
Susiwijono Moegiarso, a senior official with Indonesia’s Coordinating Ministry for Economic Affairs, confirmed to Reuters: “We are preparing a joint statement between the U.S. and Indonesia that will explain the size of reciprocal tariff for Indonesia including the tariff deal, non-tariff and commercial arrangements. We will inform (the public) soon.”

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The deal with Indonesia may serve as a template for future pacts, including with India, where policymakers now face the task of navigating a high-stakes negotiation with Trump’s administration

(With Inputs From Reuters)