US, Indonesia trade pact opens tariff-free channel for US grains
The deal reduces US tariffs on Indonesian goods to 19% from 32%.
USA – A newly finalized Agreement on Reciprocal Trade between the United States and Indonesia is set to reshape bilateral trade flows in grains and biofuels, granting Indonesia tariff-free access for US ethanol, corn, distiller’s grains, corn gluten meal, sorghum and barley.
The development was confirmed by the US Grains & BioProducts Council (USGBC), which described the agreement as a strategic breakthrough for US feed grain and co-product exporters.
The broader deal, finalized on Feb. 19, reduces US tariffs on Indonesian goods to 19% from 32%, while removing tariffs on most US goods entering Indonesia.
For the US grains sector, the immediate commercial impact lies in improved price competitiveness in one of Southeast Asia’s largest feed and fuel markets.
Indonesia, with a population exceeding 275 million, is one of the region’s fastest-growing consumers of animal protein and transportation fuels.
According to the US Department of Agriculture (USDA), Indonesia imports significant volumes of feed grains annually to support its expanding poultry and aquaculture sectors.
Corn demand in Indonesia has risen steadily over the past decade, driven by feed mill expansion and government efforts to modernize livestock production.
A central pillar of the agreement is Indonesia’s commitment to biofuel blending. Under the deal, the country will adopt transportation fuels mixed with E5 by 2028 and scale up to E10 by 2030, with longer-term inclusion of E20 in its fuel mix.
This roadmap aligns with global decarbonization efforts and could create sustained demand for US ethanol exports. The Renewable Fuels Association has consistently highlighted Southeast Asia as a priority growth region for US ethanol, citing rising gasoline consumption and policy shifts toward cleaner fuels.
Indonesia has previously implemented biodiesel mandates, particularly palm-based B30 blends. The new ethanol blending commitments signal diversification in its renewable fuel strategy.
Beyond tariffs, the USGBC indicated that Indonesia will remove unjustified sanitary and phytosanitary barriers that undermine reciprocity.
Non-tariff measures have historically complicated US grain access in several Asian markets. The commitment not to impose quantitative restrictions on US exports could allow corn purchases to exceed current commitment volumes, offering further upside for US exporters.
Mark Wilson, chairman of the USGBC, praised US President Donald Trump and his administration for continuing to open markets around the world to US corn, sorghum, barley and co-product producers and connecting them to those who want and need our products.
“This move is a welcomed development and a win-win for American producers and Indonesian consumers alike,” he said.
For US producers, the agreement comes at a time of heightened competition in global grain markets, particularly from South America.
Expanded access to Indonesia provides diversification beyond traditional buyers such as Mexico, Japan and South Korea.
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