Our officials involved in trade negotiations with the US are in frantic damage control mode. BBM himself was trying hard not to sound disappointed after his meeting with Trump.
“One (percentage point) might seem like a very small concession. However, if you put it into real terms, it is a significant achievement,” BBM said in a news conference after his Trump meeting. But BBM must know he and his team should have done better.
Indonesia’s President Prabowo Subianto also got a 19 percent tariff from Trump but a much larger drop from their current 32 percent. And he didn’t have to give them military bases or go to Washington DC but only talked to Trump by phone.
Trump was patronizing BBM as he kept praising him as a tough negotiator. But he showed the world he was an even tougher negotiator.
Trump posted on Truth Social: “We concluded our Trade Deal, whereby The Philippines is going OPEN MARKET with the United States and ZERO Tariffs. The Philippines will pay a 19 percent tariff.”
Trump most likely understood it as total capitulation.
In terms of trade, our share of US imports last year was a minuscule 0.04 percent of their total imports. We mean nothing to them in this regard.
But the US is the top destination for our exports, accounting for 16.6 percent of our total exports. The US is extremely important for our small export sector.
We may have prematurely offered zero tariff to the US in the hope the Americans will suggest or agree to a free trade agreement.
But BBM clarified later to newsmen that the zero tariff only covers a limited number of products like cars, soya, wheat and pharmaceuticals.
What if Trump thought it covers all US exports? Trump can have a hissy fit if he thinks we are backtracking on the zero tariff offer we made and punish us with a higher tariff.
Frederick Go, Special Assistant to the President for Investment and Economic Affairs, is now insisting that the US will still pay tariffs on corn, pork, poultry, fish, sugar, rice and other farm products. Is Go sure Trump understood it this way?
Joey Salceda who was kibitzing in DC claims “effective tariffs on Phl exports were just at 6.65 percent, thanks to exemptions negotiated prior to the PBBM visit. That is the second lowest in ASEAN (next to Malaysia).”
The headline rate (19 percent) can be deceiving, according to Salceda. “Treat the (one percentage) reduction as a side-gesture, on top of many other concessions given by the US.”
Salceda insists “only around 31 percent of Philippine exports are subject to the 19 percent tariff. The rest (products under electronics, wood, metals, fuels, and chemicals) are subject to preferential tariff rates already existing under multiple trade agreements because of exemptions under Annex II of Executive Order 14257 of April 2, 2025.”
Hopefully, that’s how Trump understands it. Trump is not into details. He is a headline person.
Meetings at the Oval Office are like an episode in The Apprentice, Trump’s long-running TV show. It is Live Reality TV, not different from Pinoy Big Brother. Everyone, including BBM, is playing the role of apprentices and Trump is the Big Boss whose word is final.
The question now is: What will we do if before Aug. 1 the US gives us a signed declaration by Trump imposing the 19 percent tariff on our exports to them and zero tariff on all their exports to us? Can we say no?
American agricultural exporters are top supporters of Trump and are even now probably salivating at the opportunity to export tax free to us. Trump will likely side with them if we say not all agricultural products are covered.
As Raul Montemayor of the Federation of Free Farmers puts it: “Unfortunately, those claims by our government officials have not been corroborated by the US government, which may later on insist on a wider range of affected products or a blanket application on all products.”
Montemayor also warned against the impact of duty-free imports of US agricultural commodities that may not be produced in the Philippines but are direct substitutes of local products.
These include soya, feed wheat and barley which can displace corn and copra meal, and high fructose corn syrup which is a substitute for domestic cane sugar.
“Moreover, even if this 19 percent tariff is equal to or even lower than the tariffs imposed on countries like Indonesia, Thailand and Vietnam, we will still lose out to them in terms of quality, consistency of supply and overall competitiveness.”
Sec. Deck Go is also being disingenuous by saying “Filipinos will not bear the impact of the tariff offensive. American importers and buyers of the affected products will.”
FFF reported that some US importers of Philippine coconut products were demanding that local exporters reduce their selling price to compensate for the higher tariffs. The farmers group warned that the country may lose its market share if it does not accede to these demands or if competitors offer better deals to displace Philippine exports.
Forgive Deck’s foggy thinking. Blame jetlag and desperation. It was undoubtedly a tough battle.
This is what we get for laziness. Our business sector and the government were too lazy to diversify our export markets beyond the US.
Recall that in October 2017, amid warnings that the Philippines could lose its EU trade privileges under the GSP+ program, Duterte threatened to expel all EU ambassadors within 24 hours, rejecting international criticism and trade conditions tied to human rights compliance.
Other presidents were not as crude as Duterte but were simply too content with most of our trade eggs in the US basket. Our very inward economic policies that made us a low choice for FDI didn’t help.
I still think Imelda could have gotten a better deal from Trump. She shares and understands Trump’s showbiz mentality.
Boo Chanco’s email address is bchanco@gmail.com. Follow him on X @boochanco