Philippines 'concerned' on Trump's 20% tariff despite negotiations

The Philippine government was taken aback by US President Donald Trump’s decision to slap a higher 20% tariff rate on the country’s goods exported to America despite earlier efforts to haggle for lower duties for products imported from Manila.

“We are in receipt of the United States latest reciprocal tariff for the Philippines. We are concerned that, notwithstanding our efforts and constant engagements, the US still decided to impose a 20% tariff on Philippine exports,” Special Assistant to the President for Investment and Economic Affairs of the Philippines Frederick Go said at a Palace briefing on Thursday.

On Wednesday, Trump issued his tariff notices to several trading partners including the Philippines, which he slapped with a 20% duty, higher than what he previously announced reciprocal tariff rate of 17% in April. 

Nonetheless, Go said the Philippines “remains committed to continuing negotiations in good faith to pursue a better and more comprehensive bilateral trade agreement or if possible, an FTA (free trade agreement).”

The US chief executive’s decision to increase its reciprocal tariff rate for Philippine goods by three percentage points from what was originally announced came as a surprise as Philippine investment ministers, including Go and Trade Secretary Cristina Roque, have repeatedly expressed confidence of a favorable outcome of the negotiations with their American counterparts.

In May, Roque, along with Go and Philippine Ambassador to the United States Jose Manuel Romualdez, met with US Trade Representative Jamieson Greer and tackled “mutually beneficial ways to strengthen the bilateral relations” amid the 17% tariff rate imposed by the US.

The trade dialogue was held within the 90-day suspension of Trump’s reciprocal tariff policy. The suspension expired on July 8.

The Philippine government, however, is not giving up as a delegation is set to fly to Washington D.C. for another round of negotiation.

“Myself together with DTI Secretary Cris Roque and Undersecretary Perry Rodolfo and Undersecretary Allan Gepty will be flying to the United States next week – this is actually a scheduled trip to the United States even today’s announcement ‘no. So, there will be meetings next week amongst the trade representatives ng Amerika po at ng Pilipinas (of America and the Philippines),” Go said.

Earlier in the day, a Reuters report quoted Philippine Ambassador to the United States Jose Manuel Romualdez as saying the Philippines is planning to negotiate with Washington to lower tariffs following the US move to impose higher 20% duties on goods imported from Manila.

"We are still planning to negotiate that down," Jose Manuel Romualdez said in a phone message.

Despite the higher US tariff rate versus Philippine goods, Go still saw a silver lining.

“The fact remains however that the 20% rate is the second lowest among all reciprocal tariffs that the US has imposed on the region – the lowest being the 10% off, Singapore,” the presidential economic adviser said.

In a separate statement, Trade chief Roque said the country recognizes the concerns of the United States regarding trade imbalances and its desire to strengthen domestic manufacturing.

“However, global supply chains are deeply interconnected, and unilateral trade impositions will have adverse effects to the global economy. Thus, we believe in the need for constructive engagement to address trade issues,” she said.

“The DTI, in consultation with other government agencies, will continue to actively engage with our US counterparts toward a balanced and mutually beneficial trade relationship,” she added.

Trump had earlier argued that the trading relationship between the US and its trading partners has become “highly unbalanced,” thus the higher tariffs would be targeted on countries that have significant trade imbalances with America.

In other words, the US leader is trying to level the playing field for American industries by “reciprocating” what other states are charging them for the goods they are selling in their countries.

Data from the US Trade Representative showed that the US goods trade deficit with the Philippines stood at $4.9 billion in 2024, up 21.8% from 2023.

US total goods trade with the Philippines amounted to about $23.5 billion in 2024, with American goods exports to the Philippines amounting to $9.3 billion, up 0.4%, while goods imports totaled $14.2 billion.

The US is the Philippines' top destination for its goods in 2024 at $58.7 billion, accounting for a lion’s share, or 80.2%, of the top 10 nations where it exports, according to data from the Philippine Statistics Authority.  — with a report from Reuters/RSJ/AOL, GMA Integrated News