GAPKI: Zero-percent tariff expected to boost palm oil exports to the US
Jakarta - The Indonesian Palm Oil Association (GAPKI) has stated that a zero-percent tariff is expected to increase Indonesian palm oil exports to the United States.
GAPKI Chairman Eddy Martono said that Indonesian palm oil exports to America have increased consistently over the past five years, growing from approximately one million tonnes to over two million tonnes.
“I am confident that if this is managed well, especially when tariffs return to zero percent, within the next 2-3 years we should be able to approach approximately three million tonnes,” Martono said when met by ANTARA in Jakarta on Friday evening (27 February).
According to him, the United States imports substantial quantities of palm oil, particularly from Indonesia, meaning Indonesian palm oil’s market share in America has reached 89 percent.
GAPKI believes that American consumers currently switching from soybean oil to palm oil present an opportunity to increase palm oil exports to the US.
Regarding the Indonesia-US trade agreement, GAPKI awaits further action from the government.
For context, the Indonesian Government hopes that zero-percent tariffs for several export commodities to the American market remain in place, despite the US Supreme Court cancelling the reciprocal tariff policy previously implemented by US President Donald Trump.
Trade Minister Budi Santoso explained that there is currently a consultation period following the US Supreme Court’s decision.
On Thursday (19 February), the Indonesian Government and the US officially signed a reciprocal tariff agreement. Under the agreement, 1,819 Indonesian product tariff lines received duty-free entry facilities up to zero percent.
Products covered include palm oil, coffee, cocoa, spices, rubber, electronic components including semiconductors, and aircraft components.
However, one day after the agreement, on Friday (20 February), the US Supreme Court ruled that President Trump did not have the authority to impose global tariffs under the International Emergency Economic Powers Act (IEEPA).
The ruling led the US to begin implementing temporary global tariffs of 10 percent, with the White House planning to increase them to 15 percent.
Indonesia’s Coordinating Ministry for Economic Affairs has assured that there will be further discussions with the US following the Supreme Court’s decision invalidating Trump’s reciprocal tariff policy.