Indonesia seeks 0 percent US tariff on palm oil, mirroring Malaysia

Indonesia is pushing for negotiations with the United States to reduce palm oil tariffs to 0 percent, as agreed between the United States and Malaysia.

“This (palm oil tariff negotiations) is still ongoing. Hopefully, in the discussions, we can at least reach a consensus similar to Malaysia,” the ministry’s Acting Director General of Agro-Industry, Putu Juli Ardika, noted on Wednesday.

This statement relates to Malaysia’s successful bid to reduce import tariffs to the United States from 25 percent to 19 percent, as stipulated in the recently signed reciprocal tariff agreement with the US.

Malaysian leading products such as palm oil, rubber products, wood products, aviation components, and pharmaceutical products were exempted by the US from the 19 percent tariff, or reduced to a 0 percent tariff-free.

Therefore, Ardika conveyed Indonesia’s expectation in securing a comparable outcome in negotiations with the United States.

According to him, a 0 percent tariff on Indonesian palm oil products entering the US can help the country to compete on equal footing with Malaysia in the same market.

“If we can be on par with Malaysia (with a 0 percent tariff), we will be on the same playing field for exports (to the US),” he emphasized.

The Coordinating Minister for Economic Affairs, Airlangga Hartarto, on September 30, said that the Indonesian government was still negotiating the final decision for the import tariff.

In these negotiations, Indonesia is targeting an exemption for several leading commodities from the 19 percent import tariff imposed by the US.

Several commodities in question, such as palm oil, rubber, and cocoa, are the main priorities in the negotiations.

Hartarto said he would immediately communicate with the Office of the United States Trade Representative (USTR) to seek clarity regarding the continuation of the negotiations.

Import tariffs on Indonesian products to the US market have been successfully reduced to 19 percent, from the previous figure of 32 percent.

This was decided in a high-level agreement following direct communication between Indonesian President Prabowo Subianto and US President Donald Trump.

Tags: Malaysia, palm oil, imports, tariffs, exports, Indonesia, United States