US President Donald Trump said on Tuesday that the US has signed a new agreement with Indonesia, under which 19% tariffs will be imposed on goods coming from there. Trump says that he is making more compromises, so that the US trade deficit can be reduced and the US gets business on better terms.
The agreement has been done before August 1, when the US is preparing to increase tariffs on most imports. At this time the talks between the US and its largest trading partner the European Union (EU) are also going on, but if this conversation fails, the European Union can retaliate.
America is also in talks with other countries. Many countries are trying to avoid more tariffs on their goods in America. Trump’s policy is often applied in a sudden and unstable manner, causing upheaval in markets around the world. According to an estimate by Yale University, the average tariff rate of the US due to Trump will increase from 2-3% to about 20.6%. However, this rate can be reduced to 19.7% when people change the shopping pattern of people.
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What is the agreement with Indonesia?
Trump reported that the agreement is similar to the previous agreement with Vietnam. It will take about 19% tariff on all the items coming from Indonesia, which was 10% earlier. But there will be no tariff on the goods sent from America to Indonesia. Also, there will be strictness on the goods coming into the US via China via Indonesia. In addition, Indonesia will also buy some American goods.
They will give us 19% tariffs, but we will not give them anything: Trump
Outside the Oval office, Trump said, ‘They will give us 19% tariffs, but we will not give them anything … We will get full access in Indonesia, and we have some deals that will be announced soon.’ In addition, Trump later stated on his Truth Social Platform that Indonesia has agreed to buy US $ 15 billion US energy products, $ 4.5 billion agricultural products and 50 Boeing aircraft. However, it was not mentioned how long this purchase would be completed.
Negotiations with India also on: Trump
Trump said that talks with India are also moving in the same direction. He said, ‘India is also doing the same. Now we are getting complete access to India too. Earlier we did not have such access to these countries. Now we are achieving this because of our tariff policy.
America and Indonesia total trade around $ 40 billion
The total trade in the US and Indonesia is around $ 40 billion. Last year, the US was mainly exported from Indonesia to Palm oil, electronic equipment, shoes, tires, rubber and frozen shrimp. Trump sent a letter to the President of Indonesia last week, which warned to impose 32% tariff from 1 August. Similar letters Trump has also sent to Canada, Japan, Brazil and other countries, in which 20% to 50% tariffs have been talked about. However, Trump has been able to make only a few compromises so far. He claimed that he would ’90 agreements in 90 days’. Currently, the US has entered into agreements with Britain and Vietnam, while talks are going on with China.
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European Union will impose counter tariffs if the conversation fails
Amidst an agreement with Indonesia, the European Union has warned that if the talks with the US fails, it will also impose counter tariffs. The European Union plans to impose tariffs on American goods of 72 billion euros, including Boeing aircraft, alcohol, cars, chemicals and agricultural products. At the same time, Trump has threatened to impose 30% tariffs on goods coming from the European Union since August 1. European officials described it as ‘not accepted’ and said that this will affect trade between the two sides badly.
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