Indonesia Offers Wheat Deal, Tariff Cuts to U.S.

Washington and Indonesia have reached a major agreement through their ongoing tariff negotiations which includes a $500 million wheat purchase from the United States and near-zero duty reductions for essential American products. The proposed measures seek to prevent the U.S. from imposing a 32% tariff on Indonesian exports.

Airlangga Hartarto confirmed the proposals while stating that the government would reduce agricultural product import duties to near zero if the U.S. takes corresponding actions. The United States recorded a $17.9 billion trade surplus with Indonesia during 2024.

The economic pact worth $34 billion includes aircraft orders from Garuda Indonesia national carrier as part of its broader concessions. The airline Boeing is discussing a potential purchase of between 75 and 100 aircraft.

The wheat deal requires Indonesian flour millers to acquire 2 million tons of U.S. wheat through tender processes according to Franciscus Welirang who leads the industry. The main suppliers of wheat to the United States include ADM, Cargill, Bunge and United Grain.

The initiative demonstrates Jakarta’s immediate need to settle trade disputes before the U.S. tariff deadline while strengthening its relationships with American suppliers because of changing global trade patterns.