News analysis

Prabowo and Trump have struck tariff deal – but at what cost to Indonesia?

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Indonesian President Prabowo Subianto said his conversation with US President Donald Trump heralded “a new era of mutual benefit” between both sides.

PHOTOS: REUTERS

Summary

• US and Indonesia struck a trade deal, lowering tariffs to 19% for Indonesia, but Indonesia committed to $15bn in US energy, $4.5bn in agriculture and 50 Boeing jets.
• Experts question financing and implementation of Indonesias commitments, especially regarding Garudas financial state, and potential conflict with renewable energy goals.
• Concerns raised over potential demands for similar concessions from other trading partners like China and the need for careful execution to maximise benefits and avoid fiscal strain.

AI generated

SINGAPORE – The trade deal announced on July 15 lowering US tariffs on Indonesian goods is seen by some as a diplomatic win for President Prabowo Subianto, though others warn that he may have overpromised and burdened Indonesia with costly commitments.

US President Donald Trump broke the news on his Truth Social platform, saying that he had

struck a trade pact with Indonesia

“They are going to pay 19 per cent 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,” he later told reporters.

No details have been given about the deal, which comes after deals Mr Trump

has made with Vietnam