India Eyes US-Style Trade Deal as Trump Unveils 19% Tariff Pact with Indonesia

US President Donald Trump has stated that India is working on a trade deal similar to the recent agreement between the US and Indonesia, which could mark a significant shift in India's trade relations with Washington. Under the US-Indonesia deal, American goods are allowed to enter Indonesia tariff-free, while Indonesian exports to the US face a 19% tariff.

President Trump, speaking to reporters in Washington, noted, “India is working along that same line.” He suggested the US expects greater market access in India, though it remains uncertain whether New Delhi would accept similar terms, which may be politically and economically challenging. Notably, Trump has set an August 1 deadline for finalizing multiple trade agreements, including one with India. If a deal is not reached by that date, the US may impose tariffs of up to 35% on Indian goods.

In the broader context of global trade realignment, Trump has emphasized that the US is using tough tariff policies to extract better deals and market access from multiple nations, particularly for critical resources such as copper and rare earth minerals—key inputs in electronics, renewable energy, and defense technologies.

Meanwhile, Trump unveiled the full details of the US-Indonesia trade deal, describing it as a “great deal for everybody.” Announced on his Truth Social platform, Trump confirmed the agreement includes a 19% tariff on Indonesian goods entering the US and stricter measures on transshipped goods—goods rerouted through other countries to avoid high tariffs. The US had previously threatened a 32% tariff on Indonesia, which will now not take effect due to the agreement.

As part of the deal, Indonesia will purchase $15 billion worth of US energy products, $4.5 billion in American agricultural goods, and 50 Boeing jets, many of them Boeing 777s, over an unspecified period. The purchase commitments reflect a major economic collaboration and help the US balance trade with the Southeast Asian nation.

In a related move, Trump revealed that a preliminary trade deal with Vietnam is also “pretty well set.” While details remain scarce, the deal is expected to include provisions against illegal transshipments, which are to be penalized with tariffs of up to 40%. Transshipment refers to the practice of rerouting exports through third-party countries to avoid high tariffs—an issue the US is actively clamping down on.

Smaller countries are also being notified of updated tariff levels, expected to be “a little over 10%,” with Trump hinting that more than 20 nations have received letters outlining new trade terms. These countries include EU members, Japan, South Korea, Malaysia, and even Canada and Mexico, who were initially not targeted in Trump's "reciprocal tariff" initiative launched in April.

As part of that broader plan, Trump had imposed a 10% tariff on nearly all US trading partners in April and announced intentions to raise that rate substantially. After initially threatening steeper duties by July 9, the White House postponed the deadline twice, settling on August 1 as the new cutoff. Trump has since been actively sending out letters to trading partners outlining their revised tariff obligations under the updated policy.

On another front, Trump reiterated that countries purchasing energy from Russia, including India, could face a 100% tariff unless Russian President Vladimir Putin agrees to a peace deal with Ukraine within 50 days. The goal, Trump emphasized, is to cut off financial flows to Moscow and pressure energy buyers into aligning with the US stance on ending the ongoing conflict.

Despite legislative momentum around trade sanctions, US Senator John Thune announced a delay in pushing forward a bill proposing a 500% tariff on Russian energy imports. Trump downplayed the need for such extreme legislative action, asserting that he could enforce trade penalties through executive orders if necessary.

Trump's recent moves underscore a broader strategy to renegotiate US trade relations on more favorable terms, using tariffs as leverage to compel foreign governments into major purchase agreements and regulatory concessions. Although the approach has sparked global debate, Trump claims it is helping the US regain market access, especially in sectors deemed strategic, such as energy, agriculture, aviation, and technology.

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