Indonesia seeks zero US duties on palm oil

Indonesia is working to gain stronger leverage to secure a zero percent 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 talks with the United States.

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, economist Bhima Yudhistira noted that the US market for Indonesian palm oil remains relatively small, meaning that a tariff reduction alone would not provide significant benefits.

Experts recommend that Indonesia simultaneously pursue reciprocal tariff reductions on other key exports such as apparel and footwear, which account for over 60% of US-bound exports. “The focus should be on substantial tariff cuts for apparel and footwear, as they represent the largest share of US imports,” Yudhistira stressed.

Additionally, experts highlight Indonesia’s strategic role in Southeast Asia and its potential to leverage its large domestic market, economic influence, and skilled workforce to strengthen its negotiating position. Mohammad Faisal of the Center for Reform on Economics (CORE) noted that achieving a zero percent tariff on palm oil requires a special agreement with the US, but warned that it will not be easy.

The Indonesian government has already offered several concessions in previous reciprocal tariff negotiations and is now exploring new options to reach an agreement. Coordinating Minister for Economic Affairs Airlangga Hartarto confirmed that talks on the final US import tariff decision are ongoing, with Indonesia aiming to exempt key exports, including palm oil, rubber, and cocoa, from the current 19% US tariff.

Tags: palm oil, USA, duties, Indonesia