A $13.9 billion deal to deliver advanced fighter jets to Indonesia—an agreement years in the making—now teeters on the edge as a sudden escalation in U.S. trade policy threatens to upend one of Southeast Asia’s most strategically significant defense partnerships.
The memorandum of understanding signed in August 2023 between Boeing and the Indonesian government was hailed as a milestone. The sale of 24 F-15EX Eagle II fighter jets promised not only to boost Indonesia’s aging air force but also to solidify ties with a country viewed as critical to Washington’s Indo-Pacific strategy.
But on April 2, 2025, former President Donald Trump, during a high-profile speech in the White House Rose Garden, announced sweeping new tariffs on imports from several Southeast Asian countries. Indonesia, a major U.S. trading partner, was hit with a 32 percent tariff. The move, part of Trump’s revived “America First” economic agenda, aimed to correct what he labeled as unfair trade practices and address the U.S. trade deficit.
That announcement has cast a long shadow over the F-15EX deal.
The F-15EX is not just any fighter jet. It’s a next-generation evolution of the legendary F-15 platform, renowned for its combat record and performance. With twin engines, a payload of nearly 30,000 pounds, and a top speed exceeding Mach 2.5, the F-15EX combines power and versatility in a way few aircraft can. Its range of about 1,100 miles and modular design make it ideal for archipelagic defense—especially for a country like Indonesia, which spans 17,000 islands.
For Jakarta, the aircraft represents more than hardware—it’s a shift in strategic posture. The country’s air force currently relies on older F-16s and Russian Su-27s. Upgrading to the F-15EX would not only expand its air dominance but also serve as a clear message to rivals in the South China Sea: Indonesia is serious about protecting its territory.
Yet the timing of the new U.S. tariffs is politically and economically fraught. With negotiations still in a non-binding phase and the economic outlook uncertain, Indonesia may now reconsider the deal. Officials in Jakarta are weighing the benefits of the acquisition against a backdrop of increased financial pressure.
The tariffs announced by Trump include a 32 percent levy on Indonesian goods—specifically targeting textiles, palm oil, and electronics. In 2023, Indonesia exported over $23 billion worth of goods to the U.S., with industries like garment manufacturing employing millions. The tariffs, if fully implemented, are expected to raise prices, cut profit margins, and trigger layoffs in a country still recovering from pandemic-era shocks.
Indonesian President Prabowo Subianto addressed the matter in a national address, stating that “global trade is in turmoil” and urging calm. His administration, while avoiding direct confrontation with Washington, has signaled concern. Airlangga Hartarto, Indonesia’s chief economic minister, has left the door open for negotiation, emphasizing diplomacy over retaliation.
But even with a conciliatory approach, the pressure on Indonesia’s budget is real. With a GDP of $1.4 trillion, the country has to carefully allocate defense spending. The F-15EX deal, while strategically important, may come to be seen as a luxury amid rising economic headwinds.
For Boeing, the stakes are equally high. The company has spent the past several years reeling from production delays, reputational damage following the 737 MAX crisis, and ongoing labor unrest. The defense division, including programs like the F-15EX, has served as a lifeline.
The Indonesia sale was expected to be a showcase—marking the first international buyer of the Eagle II and potentially opening the door to deals with other Southeast Asian nations like Thailand and Malaysia. Losing that sale would not only represent a financial hit but could send a damaging signal to other would-be customers about U.S. reliability as a defense partner.
Boeing is also facing domestic delays. While the U.S. Air Force has ordered 144 F-15EX aircraft, only a limited number have been delivered as of early 2025, further complicating the company’s ability to promise timely delivery to foreign buyers. Indonesian officials are closely watching these delays, wary of being caught in a production bottleneck.
The root of the crisis lies in a broader inconsistency within U.S. foreign policy. On one hand, Washington seeks to deepen military alliances in the Indo-Pacific to counter China’s expanding influence. On the other, protectionist trade measures threaten to undermine those very partnerships.
The Trump tariffs are particularly disruptive because they apply a “reciprocal” formula—punishing trade surpluses rather than targeting specific policy abuses. This has swept Indonesia into a broader sweep that also hits Vietnam, Thailand, and Cambodia with tariffs ranging from 36 to 49 percent.
While designed to stimulate U.S. manufacturing, the policy may alienate key allies. Muhammad Edhie Purnawan, an economist at Universitas Gadjah Mada, said the move could erode Indonesia’s competitiveness, warning that it could “spark a reevaluation of strategic priorities—including major defense purchases.”
Indonesia’s defense posture is shaped by its geography. It borders the contested South China Sea and controls the Malacca Strait—a choke point through which a third of global trade flows. In recent years, China’s increasing military activity near Indonesia’s Natuna Islands has stoked security fears.
The F-15EX’s long range, high payload, and capacity for air-to-sea engagement make it ideal for deterring maritime encroachment. Unlike the stealth-oriented F-35—which the U.S. has not offered—Indonesia values the Eagle II’s rugged adaptability.
Still, Jakarta is not without alternatives. France has already secured a contract to deliver 42 Rafale jets—faster and more streamlined than American negotiations. The Rafale, while smaller and with less payload than the F-15EX, is a proven platform and readily available.
Turkey has also emerged as an unexpected suitor. President Erdogan’s January 2025 visit to Jakarta included pitches for the KAAN, Turkey’s stealth fighter currently in development. Though still in prototype stages, KAAN comes bundled with drone systems like the TB2 and ground-based missiles—cheaper, scalable options for a country under fiscal strain.
Though less likely due to political and logistical hurdles, Russia and China remain on the periphery. Indonesia previously explored buying Russia’s Su-35, but the deal was shelved amid threats of U.S. sanctions. China’s J-20 stealth fighter, while operational, presents security risks and interoperability challenges.
Still, U.S. officials cannot assume Jakarta will stay locked into American systems, especially if economic penalties mount. As one Indonesian defense official put it anonymously: “We are keeping our options open. Politics change. So do partners.”
For now, both Jakarta and Washington are treading carefully. Indonesia has not walked away from the F-15EX deal, nor has Boeing been asked to halt preparations. But progress has slowed, and clarity is lacking.
Analysts believe that unless the tariffs are modified or dropped, Indonesia may delay or scale back the purchase—perhaps opting for 12 jets instead of 24. Others believe the deal could be pushed beyond 2025, especially if national elections or economic shocks further shift priorities.
Meanwhile, Boeing executives are lobbying quietly in Washington to carve out exceptions for defense-related deals. Their argument is simple: strategic partnerships should not be collateral damage in a trade dispute. Whether the administration agrees remains to be seen.
The potential unraveling of the F-15EX deal reveals a core tension in modern U.S. policy: how to balance economic nationalism with global leadership. As America seeks to reassert its influence in the Indo-Pacific, its tools of diplomacy must align. Right now, they’re at odds.
For Indonesia, the decision ahead is as much about symbolism as it is about defense. Does it double down on its Western orientation, trusting that Washington will resolve the trade impasse? Or does it explore other partnerships that demand fewer economic sacrifices?
For Boeing, the loss of the Indonesia deal would hurt—but it could also represent something larger: a turning point where U.S. defense industry influence begins to fade in regions where diplomacy falters.
And for the United States, the question lingers—can a policy of tariffs and threats coexist with alliances built on trust and shared interests? The next move, from either Jakarta or Washington, could define the future of both nations’ role in Southeast Asia.
