The Indonesian president spoke of an agreement that was reached with "extraordinary difficulty." His spokesperson sees it as a compromise that benefits both countries, while praising the effectiveness of the negotiating team.

The constants of US agreements

For other countries, this episode offers several lessons. First, Washington is keen to keep its own exports at 0% tariff. Another fixed point is severe penalties for transshipment of goods from more heavily taxed countries, a measure clearly aimed at isolating China in the region. However, a large proportion of Vietnamese and Indonesian exports are not entirely manufactured locally. Who will bear the customs burden is one of the many grey areas in these initial trade agreements.

Meanwhile, Donald Trump welcomed "full access" to the Indonesian market: "We now have access to everything. We will not pay any tariffs. They are opening up Indonesia to us, something we have never had before. This is probably the most important element of this agreement," he said.

The strategic importance of Indonesian resources

Indonesia has numerous deposits of strategic raw materials, including nickel, copper, bauxite, and tin. Jakarta had restricted nickel exports.

At the same time, Donald Trump announced 50% tariffs on copper and its derivatives from August 1, while stressing that "Indonesia is renowned for its high-quality copper, which we will use." This is a signal that an exception could be made for Indonesian copper.

Concessions to appease Washington

To soften the US tariffs, Indonesia has agreed to import large quantities of US products and technologies:

  • 50 Boeing aircraft

  • $15bn worth of US energy

  • $4.5bn worth of agricultural products

The total value of these orders already far exceeds the US trade deficit with Indonesia.

Lessons for Europe

Donald Trump would like to replicate this model with the European Union, but the task will be more difficult, i.e. eliminating non-tariff barriers and getting them to consume more American products.

To gain privileged access to the US market, countries must open up their own markets even more, particularly in sectors that are critical to the US economy. China has been able to exert influence thanks to its virtual monopoly on rare earths, while Indonesia has highlighted its diversity of strategic resources.

Although Indonesia remains a secondary trading partner for the US in Asia, it has had to make numerous concessions to bring tariffs down to "only" 19%. "Only" because its exports represent just one-fifth of those of Vietnam, which has secured a rate of 20%.

Each bilateral relationship with Washington follows its own logic, but the method is always the same: open up the market widely and offer solutions targeted at strategic US sectors.