JAKARTA — The Indonesian Palm Oil Association (GAPKI) Chairman Eddy Martono said that Indonesia’s palm oil products still have an opportunity to regain export tariff of zero (0) percent from the USA as historically Indonesia had once enjoyed zero percent tariff for its palm oil exports to the USA market.
According to Eddy Martono, Indonesia’s strategic position as the world’s largest producer of palm oil has made the country as the key player in the global supply chain of vegetable oils. “We used to enjoy zero tariff for our palm oil in the USA. We have a palm oil market share of around 89.9 percent in the country. The USA could not produce palm oil, so they will need us as exporter of palm oil,” Eddy said on Thursday (31/10/2025).
Eddy said that economic relations between Indonesia and the USA had been implemented based on the principle of mutual benefit. “The USA demand for palm oil is quite high, especially to fulfill its needs for foods and cosmetic industries,” he said.
But he underlined the importance of ‘take and give’ in trade negotiations. Indonesia needs to offer other things in order to create a fair and balanced agreement. “We can use other commodities, such as import of soybean or purchase of Boeing aircraft from the USA. With such mechanism, getting zero tariff will become more realistic,” said Eddy.
According to him, such steps are logic and worth fighting for, so that Indonesian palm oil will get the same position with Malaysia at the global market. But despite the big opportunity, economist of CORE Indonesia, Eliza Mardian reminded that reducing export tariff up to zero percent is not an easy task.
“The efforts to reduce reciprocal tariff from 32 percent to 19 percent have been marked with lots of compromises. Surely, the 0% tariff can only be realized through trade-off mechanism that should be seriously calculated,” he said.
Eliza cited Malaysia as an example. Malaysia has indeed got the 0% tariff, but it has to bear a number of trade commitments, which are purchases of USA products at high value.
He said that actually the USA market is not as big as other countries’ markets, so that Indonesia needs to calculate carefully before deciding its strategy of negotiations. “It’s better to focus on strengthening other potential markets than persisting to get 0% from the USA. All decisions should be based on data and ensure there is no domestic sector harmed as a result,” he added.
Tariff Negotiations
Economic Coordinating Minister Airlangga Hartarto said that the negotiations on palm oil import tariff with the USA will be started in November 2025, after the APEC conference. The government has planned that three strategic commodities –palm oil, cocoa, and rubber, can get 0% tariff, equal to Malaysia.
Indonesia has adopted such policy as part of its strategy of economic diplomacy to strengthen its position at the global market and increase its top commodity export at higher added value. As there is still big opportunity, the tariff negotiations between Indonesia–USA have drawn the attention of industry players and policy makers.
“We still have big opportunity to get 0% tariff, especially for products that cannot be produced in the USA, such as the palm oil,” said Minister Airlangga Hartarto, who leads Indonesian team for the trade negotiations with the USA.
“The government is also committed to fighting for national interest without victimizing strategic relationships with the USA,” Airlangga said in Jakarta on Monday (3/11/2025).
He added that every step of negotiations is designed based on the principles of fair and square trade, and in line with prevailing regulations and international commitment.
Currently, Indonesia’s team of negotiations is finalizing the legal documents to allow effective implementation of trade agreements. (*)
