F-15C
As new trade tensions threaten to derail years of negotiations, a deal to sell two dozen advanced fighter jets to Indonesia, a major U.S. partner in Southeast Asia, is in jeopardy.
Boeing and Indonesia signed a memorandum of understanding in August 2023 for 24 F-15EX Eagle II aircraft, which was intended to improve the archipelago’s defenses and fortify Washington-Jakarta relations.
However, President Donald Trump announced a 32 percent tariff on imports from Indonesia on April 2, 2025, as part of a larger “reciprocal” trade policy meant to correct perceived imbalances.
The tariffs, targeting Indonesia’s textiles, electronics, and other goods, have clouded the $13.9 billion deal. Economic pressures could potentially stall or even completely collapse the deal.
Boeing, already grappling with production issues and financial strain, faces significant stakes not only for this contract but also for its broader reputation in a crucial area for U.S. strategic interests. What does it mean for America’s influence overseas, and why is a defense deal now mired in trade disputes?
The focal point of the possible sale is the F-15EX Eagle II, the most recent iteration of a legendary aircraft. Originally unveiled as the F-15 Eagle in the 1970s, the jet was built to rule the skies by combining speed, firepower, and adaptability.
Boeing’s EX variant
Boeing’s EX variant offers state-of-the-art improvements, including improved electronic warfare capabilities, sophisticated radar systems, and a payload capacity of up to 29,500 pounds, which includes precision-guided munitions and air-to-air missiles.
It can engage targets at long range while carrying more ordnance than most fighters in its class, with a combat range of roughly 1,100 miles and a top speed of over Mach 2.5.
The F-15EX places more emphasis on raw power and adaptability than stealth-focused aircraft like the F-35, and it can incorporate new weapons and systems as threats change.
For Indonesia, a country of 17,000 islands spanning millions of square miles of ocean, its twin-engine design guarantees dependability over long distances.
The jet promises deterrence against regional rivals and flexibility for maritime patrols, making it a significant upgrade for Jakarta over its aging fleet of F-16s and Russian Su-27s.
Because of its strategic location along important shipping lanes in the Indo-Pacific, where tensions with China over the South China Sea have been simmering for years, Indonesia is interested in the F-15EX.
The U.S. State Department authorized the sale of up to 36 jets in 2022, but the 2023 agreement reduced that number to 24. The estimated cost of the sale included aircraft, spare parts, and support.
If completed, the agreement would make Indonesia the first foreign purchaser of the F-15EX, which would be a significant win for Boeing and a sign of growing defense cooperation between the United States and Indonesia.
However, there is still opportunity for delays or modifications because the agreement is still a memorandum and not a legally binding contract.
White House Rose Garden
The defense ministry of Indonesia has expressed excitement, with officials stating in 2023 that the jets would improve regional stability and air superiority.
However, Jakarta is under financial pressure, and the new tariffs create additional complexity that may necessitate difficult decisions.
The White House Rose Garden unveiled the tariffs, targeting nations with trade surpluses. Indonesia will be subject to a 32 percent levy in response to what the administration says are excessive duties on American goods, including 30 percent on American ethanol.
Indonesia is a major trading partner, exporting $23.28 billion worth of goods to the United States in 2023, including apparel, electronics, and palm oil.
These industries’ costs could increase due to the tariffs, which could hurt Indonesia’s economy. Speaking in Jakarta a few days after the announcement, President Prabowo Subianto said that the policies of the largest economy in the world were causing global trade to be “in turmoil,” according to the Associated Press.
With Indonesia’s $1.4 trillion GDP compared to the US’s $27.7 trillion, his chief economic minister, Airlangga Hartarto, clarified that he was willing to engage in dialogue rather than retaliation.
The financial strain may lead Indonesia, which plans to spend billions on defense, to refocus its priorities away from expensive purchases like the F-15EX.
F-15EX
Boeing is in a precarious position in this story. From the 737 MAX crashes to supply chain interruptions and labor strikes, the company has experienced years of upheaval.
Losing a big foreign sale would be painful, even though the F-15EX and its defense division have been a stabilizing force.
If Indonesia’s agreement is extended to the 36 jets that were originally suggested, it could bring in money and give other Asian buyers, such as Thailand or Malaysia, confidence.
However, a failure could damage Boeing’s standing as a trustworthy partner, particularly if trade regulations that are out of its control cause difficulties.
With production lines in St. Louis preparing to deliver jets to the U.S. Air Force, which has ordered 144, the company has made significant investments in the F-15EX.
Nonetheless, foreign sales are essential for economies of scale, and a failure in Indonesia might encourage rivals vying for the same markets.
These tariffs’ underlying trade policy reflects a change in U.S. strategy. By enacting levies based on a formula linked to surpluses rather than just reciprocal duties, Trump’s “America First” strategy aims to balance trade deficits.
Southeast Asia has been hardest hit: according to Foreign Policy, tariffs on Cambodia are 49%, Vietnam is 46%, and Thailand is 36%. Despite being lower, Indonesia’s 32% rate nevertheless affects millions of jobs in sectors like footwear and textiles.
Universitas Gadjah Mada economist Muhammad Edhie Purnawan cautioned that Indonesian exports may become “pricier and less competitive,” predicting a negative impact on the country’s $16.84 billion trade surplus with the United States in 2024.
Jakarta may be forced to reconsider expensive purchases, including those related to national security, as a result of this economic pressure.
Malacca Strait
The United States intends the tariffs to boost domestic manufacturing, but they risk offending key allies like Indonesia. Indonesia plays a crucial role in countering China’s regional ambitions. Its geography and history shape its defense strategy.
Indonesia guards the Malacca Strait, where a third of global trade flows, as the world’s largest archipelagic nation. Its air force struggles to protect this vast area using a mix of American, Russian, and European aircraft.
Unlike smaller jets like Sweden’s Gripen or France’s Rafale, the F-15EX suits this mission with its long range and large payload. Pilots—mainly Saudi and Israeli—have scored over 100 air-to-air kills with the F-15 without suffering a single combat loss.
Indonesia values this proven record as it seeks a strong deterrent without adopting stealth aircraft like the F-35. The U.S. has not offered the F-35 to Indonesia, pushing Jakarta to explore other options.
Indonesia’s non-aligned stance lets it diversify its defense partners. In 2021, Jakarta signed a deal for 42 Rafale jets and previously pursued Russia’s Su-35. However, it cancelled the Su-35 deal due to U.S. sanctions threats.
The tariffs affect more than just trade—they disrupt America’s delicate power balance in Southeast Asia. Indonesia has leaned toward Western partners in response to China’s assertiveness in the South China Sea.
Rafale Deal
Joint drills and arms deals reflect Jakarta’s growing alignment with the West. A successful F-15EX sale would cement this trend and expand U.S. influence in a region where China is gaining ground.
However, trade disputes could force Indonesia to spread its defense investments across more countries. France moved quickly—when U.S. talks slowed, the Rafale deal advanced without delay. While less likely, China and Russia still offer backup options like the J-20 and Su-57.
Concerns about sanctions and performance make these choices less attractive, but they remain on the table. Indonesia’s calm response to tariffs—seeking dialogue, not conflict—shows the trust at risk if disputes grow.
Turkey could also step in, thanks to its recent defense ties with Indonesia. President Erdogan visited Jakarta in January 2025 to promote deeper aerospace cooperation.
He pitched Turkey’s KAAN, a fifth-generation fighter still in development. The KAAN flew for the first time in 2023 and may enter production in the 2030s.
It remains unproven but promises stealth, advanced avionics, and supercruise capability. Turkey’s appeal isn’t limited to jets—it offers drones and missiles too. Systems like the Bayraktar TB2, used in Ukraine, give Jakarta low-cost, combat-tested options.
U.S.-Indonesia trade
KAAN isn’t a direct rival to the F-15EX, but Turkey’s diplomacy and pricing offer leverage. If U.S.-Indonesia trade tensions worsen, Turkey could benefit from the resulting gaps.
Turkey created the KAAN to join the elite group of fighter jet manufacturers. However, KAAN still faces engine integration challenges and relies partially on U.S.-made General Electric engines. Unlike KAAN, the F-15EX has decades of proven development behind it.
KAAN’s stealth features sound promising but remain unproven in real-world operations. In contrast, China’s J-20 and America’s F-35 already serve in active combat squadrons. Turkey’s strong defense industry and cultural connections pose serious competition.
But Indonesia, wary of past delays, may hesitate to commit to an untested fighter. France’s Rafale offers a middle ground with its 20,000-pound payload and 600-mile combat radius. It lacks the F-15EX’s raw power but is already combat-ready and widely deployed.
Jakarta’s choice will depend on cost, reliability, and political factors—not just performance. Boeing’s struggles go beyond tariffs; production delays have slowed F-15EX deliveries into early 2025. These delays raise doubts about Boeing’s ability to meet deadlines under pressure.
Boeing’s standings
Indonesia may worry about delivery timelines, especially with rising financial concerns. This deal is vital for Boeing, whose commercial airline needs defense sales to offset losses. A failure in Indonesia could weaken Boeing’s standing in markets like India or Australia.
Tariffs only worsen matters, straining Indonesia’s economy and fueling anti-U.S. sentiment. Industry experts warn that trade wars expose Boeing’s vulnerability due to global supply chain reliance.
The Indo-Pacific’s strategic location adds urgency to Indonesia’s decision. China’s navy patrols near the Natuna Islands, close to Indonesian waters. Its J-20 stealth fighters—with a 1,200-mile range—regularly assert power in the region.
With its anti-ship missiles, the F-15EX could neutralize such threats and provide Jakarta with leverage during standoffs. Without it, Indonesia’s air force could lag behind and be unable to project force over its vast territory.
In turn, the United States requires allies like Indonesia to support its regional strategy, from intelligence sharing to cooperative patrols.
A broken agreement might weaken this network, encouraging rivals to step in and take its place. The success of France with Rafale shows how quickly others can take advantage of a situation, while Turkey’s overtures imply a longer game for influence.
Conclusion
Indonesia’s reaction to the tariffs provides hints about what it will do next. Jakarta shows that it wants to maintain relations with Washington by opting for dialogue rather than retaliation.
However, domestic factors, like growing expenses and a declining value of the rupiah, might compel a reconsideration of defense expenditures.
The F-15EX remains Indonesia’s top choice, but delays give rivals more time to step in. Other options still exist, and Jakarta could shift direction if talks drag on too long.
Tension between Indonesia’s priorities and U.S. policy will test Boeing’s global reach. Boeing has closed tough deals before, like in Poland and Qatar, despite market challenges. However, trade issues now add new hurdles that Boeing can’t control directly.
The F-15EX deal reflects deeper tensions in U.S. foreign policy. Defense and trade often overlap, so a mistake on one side can harm the other. If talks stall, Boeing may lose the deal and its influence in a key region.
That would weaken America’s position where China is already expanding its reach. Although the path is less clear than it was a year ago, Indonesia may still commit to the jets to balance economic survival and security.
The tariffs could potentially weaken a crucial alliance, resulting in Boeing bearing the consequences. One question remains as the negotiations progress: can America afford to allow trade wars to jeopardize its strategic objectives?
References
- Defense News Today – Indonesia’s F-15EX Purchase Threatened by New US Tariffs
- Associated Press—Indonesian President Prabowo Criticizes US Trade Policy
- Foreign Policy—Southeast Asia Hit Hard by Trump’s Tariff Policy
- U.S. Department of Defense – F-15EX Capabilities and Foreign Military Sales
- The Boeing Company – F-15EX Eagle II Overview
- Reuters—Trump Imposes Tariffs on Indonesian Imports
- Universitas Gadjah Mada – Economic Impact of Tariffs on Indonesia
- France24 – Indonesia’s Rafale Fighter Jet Agreement with Dassault
- Turkish Aerospace – KAAN Fighter Jet Program Overview
- Facebook—Pakistan Defence Forum Discussions on F-15EX Deal
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