US Import Tariffs Will Hit Millions of Farmers of Prime Commodities, Need Quick Action

JAMBI, KOMPAS—The implementation of a new import tariff of 32 percent by the United States on Indonesia is predicted to impact the prices of the region's leading commodities. Entrepreneurs may potentially pass on the tariff increase to farmers by lowering harvest prices. The effect is likely to jeopardize the economy of millions of farming families.

An economic observer and advisor at the Alumni Association of Jambi University, Usman Ermulan, stated that the implementation of import tariffs to the U.S. would soon impact the decline in prices of key regional commodities. He cited examples such as palm oil and rubber.

In fact, at present, the prices of several leading commodities are high. The average price of oil palm fruit (TBS), for instance, is Rp 3,600 per kilogram, while the price of rubber latex reaches Rp 30,000 per kilogram. These are the highest prices, welcomed enthusiastically by farmers.

"The harvest prices, which are currently at their peak, are feared to soon be disrupted by the implementation of U.S. import tariffs," said Usman, Friday (4/4/2025).

He stated that the area of oil palm plantations in Jambi is 1.3 million hectares, while the area of rubber plantations exceeds 700,000 hectares. In Jambi Province, the number of farmers and workers in the oil palm and rubber plantation sectors reaches more than 2 million.

"This means that if the harvest price is also corrected due to the increase in US import tariffs, millions of farming families will be affected," he continued.

Previously, the President of the United States, Donald Trump, announced a list of base tariffs and new import duties to many trade partners on Wednesday local time. Indonesia was subjected to a reciprocal tariff of 32 percent.

So far, the United States has been a contributor to the national non-oil and gas trade surplus in 2024. Indonesia's trade surplus with the United States amounts to 16.08 billion US dollars out of the total non-oil and gas trade surplus in 2024, which is 31.04 billion US dollars. Indonesia's non-oil and gas exports to the United States include garments, electrical equipment, footwear, and vegetable oil.

It is feared that the current good harvest prices will soon be disrupted by the implementation of US import tariffs.

Usman said that the increase in import tariffs would not only burden entrepreneurs. Usually, entrepreneurs will pass on the burden to farmers. The way to do this is by suppressing the price of the harvest in the garden.

Another impact is that there will be trade stagnation in the future. If that happens, it is feared that it will hit the national economy.

He suggested that the Indonesian government negotiate with the US. "America needs raw materials from Indonesia. If we stop shipping, they themselves will have difficulties. The Indonesian government must be able to negotiate," he said.

In January 2025, the value of Jambi Province's exports to the US reached 170.42 million US dollars, according to data from the Jambi Province Central Statistics Agency (BPS). This value fell 21.46 percent compared to the previous month. Several commodities that caused the decline in exports include rubber, oil and gas, and vegetable oil.

Exports from Jambi in January targeted the five largest export destination countries, namely Singapore, Japan, Thailand, the US and Malaysia.

The largest contribution to total exports in Jambi is the mining group's exports, which is 58 percent, followed by the industrial group at 37.7 percent, and the agricultural group at 3.8 percent.

Agus Sudibyo, Head of Jambi Province BPS, said that when broken down by commodity, the industrial group is dominated by rubber and its processed products which contribute 18.59 percent.