Trump slaps 19% tariff on Indonesia, warns pharma duties next as India watches closely

U.S. President Donald Trump on Tuesday said that his government has reached an agreement with Indonesia under which Washington will impose a 19% tariff on goods imported from the Southeast Asian nation, while also unveiling plans to expand tariffs on pharmaceutical products. The move comes as part of Trump’s renewed effort to narrow the U.S. trade deficit and restructure global trade relationships ahead of a key August 1 deadline, Reuters reported today.

The Indonesia deal could have major implications for India, which is a key trading partner for the U.S., as global trade realigns ahead of the looming August 1 deadline.

Speaking from Pittsburgh and later in Washington, Trump said the agreement with Indonesia mirrors earlier arrangements with Vietnam, including a flat tariff—nearly double the existing 10%—on Indonesian exports to the U.S., with no duties on U.S. goods going the other way. The deal also includes a provision targeting transhipments of Chinese goods via Indonesia and a commitment from Jakarta to purchase U.S. products.

Although Indonesia is not among the top U.S. trading partners—with bilateral trade totalling under $40 billion in 2024—the agreement reflects Washington’s broader push to reshape trade terms with multiple countries. In the past year, U.S. imports from Indonesia rose by 4.8%, while exports increased 3.7%, leaving the U.S. with an $18 billion goods trade deficit. Key imports include palm oil, electronic equipment, footwear, tyres, rubber, and seafood, Reuters data showed.

Trump also revealed that similar letters detailing new tariff rates have already been sent to over two dozen countries, including Canada, Japan, and Brazil, with rates ranging between 20% and 50%. A 50% tariff on copper has also been proposed. “I prefer blanket tariffs,” Trump said, while noting that Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick continue to pursue broader trade deals.

While Indonesia may not be among America’s top trading partners, the new deal—featuring a tariff nearly double the current 10% rate and including transhipment penalties—shows Washington’s intent to reset trade terms across the board. It could also serve as a cautionary tale for countries like India, which are currently in trade talks with the Trump administration to avoid punitive measures.

“Talks with India are moving along that same line,” Trump told reporters in Washington, hinting at a potential agreement that would expand access for U.S. companies to India's domestic market.

The pharmaceutical sector is also fast emerging as a new front, Reuters reported. As per Trump, the U.S. would soon begin imposing low tariffs on imported medicines, with rates set to rise significantly over the next year.