Indonesia-US Trade Deal: Palm Oil to be Tariff-Free, Textiles at 19%

Key Developments in Trade Negotiations

Indonesia and the United States are on the verge of finalizing a significant trade agreement that will have major implications for key Indonesian export commodities. Coordinating Minister for Economic Affairs Airlangga Hartarto revealed that palm oil exports will receive tariff-free status while textile exports will continue to face a 19% tariff ¹

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The initial framework for the tariff elimination is based on the commodity list established in the previous Executive Order by former US President Trump regarding reciprocal tariffs, which will form part of the Agreement on Reciprocal Tariff (ART) ¹

. However, Indonesia has negotiated to include additional commodities, particularly palm oil, in the tariff-free list.

Implications for Indonesian Exports

The elimination of tariffs on palm oil exports to the US market is expected to significantly boost Indonesia's palm oil industry, potentially increasing export volumes and improving competitiveness against other global producers. Conversely, the textile sector will maintain its current 19% tariff, potentially affecting its export performance to the US market.