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Trump slaps 17% tariff on PH exports to US
The Philippines was not spared from US President Donald Trump's "Liberation Day" announcement of his wave of sweeping "reciprocal tariff" policy—which would go into effect on April 9—across over 100 countries.
A poster on Trump's Truth Social page showed that the Philippines' goods entering America will be slapped with a 17% tariff—still a "discounted" reciprocal tariff compared to the 34% rate that Manila charges against goods coming from the US.
However, an annex attached to Trump's statement posted on the White House's website shows that the reciprocal tariff rate for the Philippines would be at 18%.
The Philippines' tariff rate would be higher than the 10% baseline tariff on all imports to the US.
In his statement, Trump said the "trading relationship between the United States and its trading partners has become highly unbalanced, particularly in recent years," despite America's commitment to the principle of reciprocity.
It was earlier reported that the US chief's reciprocal higher tariff would be targeted on countries that have significant trade imbalances with the US.
Data from the Office of the United States Trade Representative showed that the US goods trade deficit with the Philippines stood at $4.9 billion in 2024, up 21.8% from 2023.
America's total goods trade with the Philippines amounted to about $23.5 billion in 2024, with US goods exports to Philippines amounting to $9.3 billion, up 0.4% while goods imports totaling $14.2 billion.
The US is the Philippines' top destination for its goods, accounting for 80.2% of its exports in 2024 at $58.7 billion, data from the Philippine Statistics Authority showed.
Nevertheless, the reciprocal tariff rate for the Philippines would still be lower compared to its Southeast Asian neighbors with Brunei at 24%, Cambodia at 49%, Indonesia at 32%, Malaysia at 24%, Myanmar at 45%, Vietnam at 46%; with only Singapore to be charged the baseline 10% rate.
Slower demand for PH exports
In a statement, Trade Secretary Ma. Cristina Roque said the Department of Trade and Industry (DTI) is "diligently monitoring and assessing" the potential impact on the country’s economy of Trump's imposition of reciprocal tariffs on Philippine goods.
"While our initial analysis indicates that the direct impact may be less substantial compared to other ASEAN nations such as Vietnam with 46%, Indonesia with 32%, and Cambodia with 49%, we recognize the importance of proactive engagement," Roque said, referring to the Association of Southeast Asian Nations.
Sought for comment, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the 17% tariff rate imposed on the Philippines by Trump "is the second lowest in the region after Singapore’s 10%."
"Thus, Philippine exports to the US would become 17% more expensive, so this could still lead to slower demand for Philippine exports to the US that, in turn, could lead to slower overall Philippine economic/gross domestic product (GDP) growth," Ricafort said.
Opportunities for PH
Ricafort said the higher tariffs imposed on ASEAN or Asian economies could still create some opportunities for some multinational companies to locate investments or production facilities in the Philippines "since it has one of the lowest US import tariffs."
For his part, Special Assistant to the President for Investment and Economic Affairs Frederick Go brushed off the impact of the 17% tariff on Philippine goods entering America, seeing it as a boon rather than a bane for the country's economic future.
"So, from my perspective, I think this opens up a lot of opportunities for companies that are based in the countries with higher tariffs to look seriously at investing in the Philippines to set up manufacturing facilities in the Philippines to take advantage of our relatively much lower tariff," Go said, adding that, "this is an opportunity to attract investments because we're a good ally."
Philippine Ambassador to Washington Jose Manuel Romualdez said the embassy is currently assessing the impact of the US tariff on the country.
"We’re studying the effects with Secretary Go and Secretary Recto," Romualdez said, referring to Finance Secretary Ralph Recto.
PH-US ties
The Trade chief said the government still sees an opportunity to deepen Manila's strategic partnership with Washington D.C., citing the bilateral trade relations between the two countries with "about 10% of our total trade involving the US."
She said 53% of the country’s exports to the US are electronics, while approximately 20% of Philippines’ agricultural imports are from the US.
"Our focus is on collaborative efforts to build a secure and resilient supply chain, facilitate the efficient movement of goods, and enhance economic security for both nations. We are also committed to exploring avenues for strengthened food security, expanded market access, and equitable trade," Roque said.
The Philippines' Trade chief added that she has already expressed desire to meet with her US counterpart and is currently awaiting a schedule to discuss strengthening the trade relations between both countries.
"We are committed to working closely with the United States to uphold these principles and ensure a mutually beneficial trade environment," she said.
At a Palace press briefing, Presidential Communications Office Undersecretary Claire Castro said the impact of the 17% tariff would still be studied by the Marcos administration.
"Kaya ito po ay tatanggapin natin pero kung anuman po ang maaaring impact, of course, tayo ay dapat tumugon nang nararapat pero, as of the moment, sabi nga po ng DTI very minimal po ang magiging impact sa atin nito," Castro said.
(We are accepting this but whatever the potential impact, of course, we should respond accordingly, but as of the moment, the DTI says the impact to the Philippines will be very minimal.)
Guarded optimism
Roque also said the Philippines still views with “guarded optimism” that the recent US trade policy action "will provide strategic opportunities for the Philippines to improve its economic relationship with the US."
"It is important to highlight that there are products that are exempted from the imposition of reciprocal tariffs, including product categories that are exported by the Philippines to the US such as copper ores and concentrates, and integrated circuits, among others," Roque said.
"We are carefully studying the impact of reciprocal tariffs on agri-based products, particularly food exports, noting that these are not covered by the exemptions," she added.
The Trade chief said the Philippine government aims to actively engage the US in a discussion to facilitate enhanced market access for its key export.
Meanwhile, the American Chamber of Commerce of the Philippines (AmCham), a non-profit association serving as liaison for American businesses in the country, stood firm with its aim to facilitate economic relations between Manila and Washington D.C.
The organization said, "The American Chamber of Commerce of the Philippines remains committed to strengthening the long-standing economic partnership between the U.S. and the Philippines and spurring economic growth in both countries."
"We will continue to work with our members to navigate these changes and promote mutual prosperity," AmCham said. — with reports from Anna Felicia Bajo and Michaela del Callar/ VDV, GMA Integrated News
