Recently, trade wars seem to be a trend among countries. This is so for the number of trade wars has increased lately. Take, for example, US-China trade war and Japan-South Korea trade war. The upcoming news, additionally, introduce a new trade war, Indonesia-EU, and Malaysia might join them.
Although Indonesia-EU trade war probably started in the beginning of 2019, it escalates to a new level just now. The reason is that Indonesia’s palm oil industry receives a huge blow after EU decided to apply certain regulations on the consumption and import of palm oil products.
Talking about palm oil industry, Malaysia also belongs to a palm-oil-producer country. Together with Indonesia, the country is famous for its palm oil production.
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As EU stated its regulations, Malaysia has warned them that this can potentially escalate to become a new war in the economy world. Accordingly, the country’s prediction comes true.
Today, many people are afraid that Malaysia might join Indonesia in Indonesia-EU trade war. This is so remembering palm oil industry also significantly contributes to the economy of the country.
If this really happens, this might be the greatest crossover in the trade war universe, defeating South and North Korea’s possible coalition.
Palm Oil Industry and Trade War
Palm oil industry is the oldest trading commodity in the world. Furthermore, Malaysia and Indonesia have been competing to be the world’s number one palm oil producer.
To date, palm oil industry is considered harmful. Western world opines that this is due to the deforestation of tropical rainforest which leads to over-production of carbon dioxide and destruction of orangutans habitat.
With this in mind, EU issued policies that limit the usage of palm oil products as well as their countries’ import. Malaysia and Indonesia think of it as “discrimination.”
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To face the “unfair” treatment, Indonesia recently produced a new tariff on dairy products. Accordingly, they will raise the tariffs around 20% and 25%.
Meanwhile, Malaysia has not taken any reaction yet. However, that does not mean that the country will not do so. Analysts and medias have a strong prediction that Malaysia will join the war, soon or later.
