Trump's trade deal with Indonesia includes big order for Boeing
What's the story
After the Lion Air crash in 2018, Indonesian flag carrier Garuda Indonesia had tried to cancel its remaining orders for Boeing 737 MAX aircraft. However, the country is now working to revive that deal as part of a broader strategy to build strong ties with US President Donald Trump's administration. The revival comes after Trump announced on social media that Indonesia will buy 50 planes, including many of Boeing's larger 777s.
Deal confirmation
Trump announces deal after negotiations with Indonesian President
Trump's announcement of the deal came after direct negotiations with Indonesian president Prabowo Subianto over a phone call. While the US president did not reveal the name of the buyer, Garuda Indonesia's CEO Wamildan Tsani Panjaitan had previously confirmed that he was in talks to buy 50-75 Boeing aircraft. At the time, the airlines was considering models like the 737 MAX and 787-9 Dreamliner.
Order fulfillment
Challenge for Boeing
The challenge for Boeing now is to fulfill or increase the existing order of 49 Max jets without putting Garuda in a financial and strategic bind. The airline has been struggling with its existing fleet, with at least 15 jets grounded as recently as May due to maintenance payment issues.
Trade agreement
Indonesia will also buy $15 billion worth of US energy
Trump has also struck a trade pact with Indonesia, leading to major purchase commitments from the Southeast Asian country. The deal includes a commitment by Indonesia to buy $15 billion worth of US energy, $4.5 billion in American agricultural products, and 50 Boeing jets. "They are going to pay 19% and we are going to pay nothing," Trump said earlier about the deal which was finalized after he spoke with Subianto.
Trade growth
US-Indonesia trade
Despite not being among the top 15 trading partners, Indonesia's trade with the US has been growing. In 2024, total trade stood at just under $40 billion. The Trump administration is under pressure to finalize more trade pacts after promising a string of deals recently. Other countries are seeking talks with Washington to avoid Trump's tariff plans.