This study examines the dynamics of Indonesia’s declining Crude Palm Oil (CPO) exports to the European Union following the implementation of the European Union Deforestation Regulation (EUDR) during the 2021–2023 period. The main focus of this research is to reveal how the enforcement of the EUDR operates as an instrument of structural violence that reinforces the European Union’s dominance as the center over Indonesia as the periphery within the global trade structure. Using Johan Galtung’s Structural Imperialism Theory as the analytical framework, this study explores three dimensions of domination economic, political, and cultural reflected in the policies and practices of palm oil trade after the regulation’s enactment. The research adopts a qualitative approach with a case study design, utilizing data collection techniques through in-depth interviews with key stakeholders in the palm oil industry and literature reviews of policy documents, trade reports, and academic publications. The scope of analysis focuses on the economic aspect, including non-tariff barriers and due diligence compliance costs; the political aspect, through the imposition of global standards under the phenomenon of the Brussels Effect; and the cultural aspect, concerning the construction of negative narratives about palm oil in European public discourse. The findings indicate that the implementation of the EUDR de facto creates a new layer of structural inequality in international trade through the imposition of high compliance costs on exporters from developing countries, the hegemonization of sustainability norms and rules originating from the European Union, and the reproduction of negative imagery toward Indonesia’s palm oil industry. When viewed through an Islamic perspective, EUDR is contrary to the basic Islamic principles of trade such as justice, balance, and Musharakah.