As we said in our prior report “all in all, Indonesia feels increasingly positive”. Now, with the successful negotiation of a trade deal with the US that effectively makes Indonesia the most favoured nation in all of ASEAN, Indonesia’s horizon looks even brighter. For, even if US trade does indeed only currently account for 2% of the country’s GDP, if its goods become more competitively priced in the US market than those of competing ASEAN nations, she stands to gain market share and further boost her GDP as a result.
Tariffs
In mid-July, and post the original 90-day deadline for negotiations expiring on 8th July, the US and Indonesia arrived at an agreement where a uniform 19% tariff will be applied to Indonesian goods entering the USA, versus the originally threatened 32%. In securing this deal, which makes Indonesia essentially the most favoured nation in all of ASEAN, Indonesia agreed to numerous concessions such as the multi-year purchases of fifty Boeing aircraft, the purchase of...
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