Indonesia’s Palm Oil Exports to US May Decline Due to New Tariffs

Indonesia’s palm oil exports to the United States could significantly decrease due to the introduction of 32% import tariffs on Indonesian goods, effective from August 1. This was stated by Hadi Sugeng, Secretary General of the Indonesia Palm Oil Association (GAPKI), commenting on the decision made by US President Donald Trump on July 7. According to the association’s estimates, palm oil shipments to the US may drop by 15-20%.

Currently, Indonesia accounts for approximately 85% of US palm oil imports, supplying an average of 2.25 million tons of the product annually over the past three years. The high tariffs could weaken the competitiveness of Indonesian palm oil in the US market, giving way to Malaysian palm oil, which faces lower tariffs, as well as soybean and canola oils.

GAPKI notes that the tariffs may lead to a loss of market share to other producing countries and alternative vegetable oils. This poses significant challenges for Indonesian exporters, who have traditionally dominated the US palm oil market.

To mitigate the impact, Indonesia plans to intensify negotiations with the US to seek a possible reduction in the tariffs. The government and industry representatives hope to reach a compromise that will help maintain the competitiveness of Indonesian products in one of their key export markets.

Tags: Indonesia, palm oil, USA, duties, restrictions