Trump Locks In 19% Tariff Deal with Indonesia--Boeing Wins Massive Jet Order

Indonesia may have just scored one of its biggest trade wins in years. President Prabowo Subianto confirmed he reached a deal with Donald Trump to cap US tariffs at 19%, down from the 32% that had been floated earlier. In return? A potential $15 billion in US energy imports, $4.5 billion in agriculture purchases, and a 50-plane order from Boeing BA to upgrade Garuda Indonesia's aging fleet. The announcement, made after direct talks between the two leaders, gives Indonesia the second-lowest US tariff rate in the regiononly Singapore is lower. Prabowo called the negotiations tough, but fair, and suggested a follow-up trip to Washington this fall.

Investors now have one less thing to worry about. The trade deal could give Indonesia's labor-heavy sectors like textiles and palm oil a shot in the arm. These exports only account for ~2% of Indonesia's GDP, but the jobs they support matter a lot more politically. Local officials are calling the outcome a huge win, and while 19% is still a tough rate, it's a far cry from where things were headed. Boeing's involvement adds another layerGaruda's fleet needs replacing, and US plane makers are clearly back in play. The surprise in all this isn't just the numbersit's the fact that a deal got done, when so many expected more delay.

Still, plenty of fog remains. Indonesia's central bank moved quickly, cutting interest rates just hours before the announcement, and signaling it's ready to ease further if needed. The government recently trimmed its growth outlook to 5% for the year, citing trade risks. While the tariff news helps stabilize sentiment, analysts say it's too early to gauge the full macro impact without knowing when the purchases will materializeor how the US might respond in an election year. For now, though, the market got what it wanted: less noise, more clarity, and a signal that Indonesia can still play the geopolitical game when it counts.