JAKARTA/WASHINGTON – President Donald Trump confirmed on July 22 that the US and the Philippines have reached a trade agreement following a White House meeting with President Ferdinand Marcos Jr. The deal stipulates a 19% tariff on Philippine exports to the US, while American exports entering the Philippines will face zero tariffs.
Trump described the visit as “beautiful” and praised Marcos as a “tough negotiator,” though official signatures have yet to be disclosed. The tariff rate aligns with the framework Trump had announced earlier this month and replaces the interim 17% rate set in April.
Indonesia Deal: Broad Market Access in Exchange for 19% Tariffs
Details emerged for the Indonesian trade pact, matching the 19% tariff on Indonesian goods headed to the US, while the US will enjoy near-zero tariffs on 99% of its exports to Indonesia. As part of this agreement:
- Indonesia will lift export restrictions on critical minerals and accept US vehicle safety and FDA product standards.
- It will eliminate pre‑shipment inspections and other non‑tariff trade barriers for US agricultural and industrial goods.
- Anticipated commercial purchases include $3.2 billion in aircraft, $4.5 billion in agricultural products, and $15 billion in energy imports.
In total, this framework marks the first instance under Trump’s presidency where a trading partner has dismantled a suite of non‑tariff barriers in return for tariff concessions.
Trump’s Trade Strategy and Global Challenges
These agreements represent the fifth and sixth reciprocal trade deals Trump has announced in the past three months. The administration had previously paused threatened tariffs of up to 32% on Indonesia and 20% on the Philippines, shifting focus to reaching mutually beneficial deals before the looming August 1 deadline.
Trump has emphasized quality over quantity, making clear that nations failing to conclude terms by next week may face steep tariff increases — including 50% on certain products and a blanket copper tax. Despite this, markets appear largely indifferent.
Implications & Next Steps
| Country | Tariff to US | Tariff to US Exports from US | Key Concessions by Partner |
|---|---|---|---|
| Philippines | 19% | 0% | Ongoing military cooperation |
| Indonesia | 19% | 0% on ~99% of US exports | Removal of non‑tariff barriers; critical minerals access |
Both frameworks are expected to be finalized in formal agreements in the coming weeks. The US–Indonesia deal will be memorialized through an executive order, and further commercial commitments—especially Indonesian purchases of US-made goods—are anticipated.
Analyst Perspective
Experts note that these deals signal a shift from broad tariff threats to targeted economic diplomacy, designed to enhance US exporters’ access while reinforcing the administration’s tough negotiation posture. However, critics caution that tariff-takers—the American businesses paying these tariffs—might face cost pressures, which could in turn impact consumers. (zai)