Jakarta. The United States offered Indonesia a choice between investing in Alaska or purchasing Boeing aircraft as part of trade negotiations aimed at reducing the 32 percent tariffs imposed by President Donald Trump, according to Coordinating Minister for Economic Affairs Airlangga Hartarto.

Indonesia ultimately opted to buy Boeing jets for national flag carrier Garuda Indonesia, Airlangga said on Monday at the Investor Daily Roundtable in Jakarta. He did not elaborate on the Alaska investment proposal.

Prior to the negotiations, Garuda had already announced plans to expand its fleet from about 70 to over 100 aircraft.

"Indonesia chose to purchase the planes because we genuinely need them,” Airlangga said in a discussion with talk show host Enggartiasto Lukita. The estimated $3.2 billion purchase is intended to improve inter-island connectivity across the vast Indonesian archipelago.

The decision, Airlangga added, came directly from President Prabowo Subianto, who discussed the matter with Trump in a phone call during his recent tour of Europe.

Although Airlangga led Indonesia’s trade negotiation team in Washington, he confirmed the Boeing deal was not part of their original proposal.

He also noted that Indonesia was not alone in being encouraged to buy Boeing aircraft in exchange for tariff reductions. “Nearly every country involved ended up buying Boeing jets. A Middle Eastern country, for instance, agreed to a $200 billion purchase,” he said.

On May 14, Qatar reportedly signed a purchase agreement for 160 Boeing jets, valued at $200 billion, during Trump’s Gulf tour.

As part of Indonesia’s broader $35 billion trade offer to the US, Jakarta also agreed to significantly increase its imports of American wheat, soybeans, and energy products. In return, the US will lower its tariffs on Indonesian goods to 19 percent from the previous 32 percent.

Indonesia also committed to scrapping import tariffs on 99 percent of US goods. According to Airlangga, several Indonesian commodities not produced in the US -- such as crude palm oil and cacao -- could enjoy zero tariffs under the new agreement.

Add as a preferred source on Google +