- Indonesia strikes $34B in U.S. energy and grain deals to avert steep tariff penalties.
- Pertamina, Sorini Agro, and FKS Group lead MoUs for LNG, crude oil, corn, and wheat.
- Trump’s tariff list places Indonesia among 14 countries facing increased import duties from Aug 1.
Under the precautionary principle of protecting its manufacturing and export domains, Indonesia initiated multi-billion-dollar agreements with U.S. companies in energy and agriculture. The commitments are intended to stave off likely increases in U.S. tariffs under the latest trade posture of the Trump administration.
Pertamina, the state oil company, signed a memorandum of understanding to enhance U.S. energy imports, notably LPG and crude oil. In addition, the Indonesian corn and wheat purchasing companies Sorini Agro Asia Corporindo and FKS Group signed agreements with U.S. agri-major Cargill. These memoranda of understanding (MoUs) are part of a larger commitment to increase its U.S. imports well above previous years of approximately $34 billion, ahead of a deadline of August 1 to avoid increased tariffs on U.S. agricultural imports and additional secular market penalties.
New Tariffs to Be Imposed on Goods to the U.S. Starting August 1
Indonesia has a 32% tariff, while Laos and Myanmar have a tariff of 40%, and a number of other ASEAN and Asian economies have tariffs of 25%–36%, according to the U.S. government's tariff chart on July 7. Indonesia joins a dozen or so other countries which will have increased duties, as stated by the White House. A number of other neighboring countries, including Laos and Myanmar, had the highest tariffs at 40%. Japan, South Korea, Malaysia, and several others had tariffs increased by 25%, which has increased urgency across Asia's trade corridors.
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The trade transactions were done by Core Economic Minister Airlangga Hartarto and the Indonesian delegation in Washington, D.C. Hartarto said the dealings were not just about tariff threats, but also to reflect Indonesia’s strategic move to reverse a trade deficit in goods amounting to $17.9 billion with the U.S. in 2024.
Officials from both countries believe moving trade around along certain lines will serve to deepen economic relations, stabilize regional supply chains and ensure purchasers and suppliers consider Indonesia a major manufacturing and logistics hub in Southeast Asia.