US to lift tariffs on Indonesian palm oil, cocoa and rubber

The United States has expressed its agreement in principle to exempt Indonesian palm oil, cocoa and rubber from the previously imposed 19% tariffs on Indonesian goods. This was stated by the Coordinating Minister for Economic Affairs of the Asian republic, Airlangga Hartarto, in an interview with Reuters.

“We are waiting for their (the United States — editor’s note) response, but during the meeting [with the American side], in fact, the principle [of exemption from tariffs] of goods not produced in the United States, such as palm oil, cocoa and rubber, was agreed upon, <…> it will be zero or close to zero,” he said, meaning that a final agreement has not yet been reached. According to him, the timing of the agreement has not yet been determined, since representatives of the American administration are busy with trade negotiations with other countries.

In early July, US President Donald Trump sent letters to the leaders of a number of countries, including Indonesia, about his intention to introduce additional tariffs from August 1. US tariffs on Indonesian goods were to be 32%. Indonesian authorities have declared their readiness to increase imports of American oil, gas and agricultural goods in the event of a reduction in trade duties. After concluding a trade deal with Jakarta, Washington reduced the tariff rate on Indonesian products from 32 to 19% and the country now has one of the lowest rates in Southeast Asia.

However, the tariff is still higher than 10% in Singapore and the country’s authorities intend to continue the fight to reduce rates. Earlier it became known that the Indonesian Ministry of Economic Affairs continued to insist on the complete abolition of tariffs on goods that are not produced in the United States, including coffee, cocoa beans, rubber and palm oil. Indonesia remains the main supplier of palm oil to the United States with a share of 85%.

Tags: Indonesia, palm oil, USA, duties