Indonesia seeks zero US tariff on palm oil
Indonesia is seeking to secure zero US import tariffs on palm oil and is working to strengthen its bargaining position. While the US imported 1.39 million tonnes of Indonesian palm oil in 2024, experts say tariff cuts alone will have limited impact unless tied to broader concessions. Analysts suggest pairing the talks with reducing tariffs on clothing and footwear, which make up over 60% of Indonesia’s US-bound exports. Negotiations remain ongoing, with Jakarta also pushing tariff relief for rubber and cocoa.
Indonesia is seeking greater negotiating power to achieve a zero US tariff on palm oil, following Malaysia’s example, local media report. Negotiations have been ongoing since September 2025, with experts emphasizing the importance of a strategic approach in negotiations with the US.
According to Indonesia’s Central Bureau of Statistics (BPS), the country exported 1.39 million tons of palm oil to the US in 2024, making it the fourth-largest market after India, Pakistan, and China. However, as economist Bhima Yudhistra noted, the US market for Indonesian palm oil remains relatively small, so tariff reduction alone will not yield significant benefits.
The expert advises Indonesia to simultaneously negotiate reciprocal tariff preferences for other key exports, such as clothing and footwear, which account for over 60% of exports to the US. “We need to focus on significantly reducing tariffs on clothing and footwear, as they are the main export to America,” Yudhistra emphasized.
Furthermore, experts note Indonesia’s strategic role in Southeast Asia and its potential to leverage its vast domestic market, economic influence, and skilled labor force to strengthen its negotiating position. Mohammad Faisal of the Center for Economic Reform (CORE) added that achieving a zero palm oil tariff requires a special agreement with the US, but this will not be easy.
The Indonesian government has already offered a number of concessions in previous bilateral tariff negotiations and is currently exploring new options for agreement. Economic Affairs Coordinator Airlangga Hartarto confirmed that negotiations on a final decision on US import tariffs are ongoing, and Indonesia is seeking to exempt key exports, including palm oil, rubber, and cocoa, from the current 19% tariff.
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Source : Ukr Agro Consult
