Lang
Eddy Martono, chairman of the Indonesian Palm Oil Association, said on Friday that Indonesian crude palm oil exports to the United States could face stagnation after US President Donald Trump imposed a 32% tariff on goods imported from Indonesia.
Martono suggested that the government ease domestic market obligation (DMO) rules, export approval requirements, and export levies to reduce the impact of the new tariff on the commodity.
He told The Jakarta Post on Friday: “We should also look for new export markets,” noting that companies could consider targeting markets in Africa, Central Asia, and the Middle East.
The United States is Indonesia’s second-largest export market after China, accounting for more than half of Indonesia’s $31 billion trade surplus in 2024.
Indonesia exported goods worth $26.3 billion to the United States, while importing only $9.5 billion. Its key exports include electrical equipment, apparel, footwear, crude palm oil, and rubber.
Indonesia is the world’s largest producer of crude palm oil, and its exports have grown steadily over the past five years, rising from less than 1 million tonnes to more than 2 million tonnes last year.
However, Washington announced additional tariffs on imports from all countries on Wednesday, aiming to reduce the US trade deficit with the rest of the world and support domestic employment.
Despite the new tariffs, Martono said not all palm oil products can be replaced by other vegetable oils. He claimed that margarine cannot be produced from soybean oil because of health concerns and that some palm-based oleochemical products cannot be substituted with other vegetable oils.
He added: “If demand for Indonesian palm oil continues in the United States, the final party affected will be the American consumer.”
The tariffs came in response to what the White House described as unfair trade practices, including local content requirements, complex import licensing procedures, and rules requiring natural resource companies to repatriate export earnings above $250,000, among other policies viewed as obstacles to foreign businesses.
Business groups have called on the government to enter bilateral talks with the United States to secure access to the world’s largest consumer market.
The United States imposed a baseline 10% tariff on imports from all countries starting Saturday, with a second round of reciprocal tariffs due four days later. These target countries with which the United States has large trade deficits, including Indonesia.
The tariffs apply to almost all goods, with some strategic exceptions such as semiconductors, pharmaceuticals, copper, and critical minerals such as nickel.
The 32% rate imposed on Indonesian goods is lower than Vietnam’s 46% and Thailand’s 36%, but higher than Malaysia’s 24%, the Philippines’ 17%, and Singapore’s 10%.