Indonesia: Drivers and Trends of US Agricultural Trade with Indonesia Opportunities and Challenges

Following a lengthy period with a trade surplus, the U.S. trade balance with Indonesia in agricultural products began to reverse in 2021. Largely driven by increased palm oil exports, the highest trade deficit was recorded in 2022 at $1.8 billion. If the product scope is expanded to agricultural related products, including seafood and wood products, the deficit is even higher, valued at $3.7 billion in 2024. Overall, several factors substantially contributed to the U.S. agriculture trade deficit. These include increased competition (e.g., via tariff preferences and lower prices), non-tariff barriers (e.g., import licensing), and high U.S. demand for select Indonesian products. However, significant opportunities remain in this promising, albeit challenging, market, especially if the tariff and non-tariff barriers can be addressed.