Philippines to continue trade discussions with US

As Trump moves start of new tariffs

MANILA, Philippines — The Philippines will continue to engage with the United States and provide support to exporters, following the delay in the start of the imposition of the new reciprocal tariffs to Aug. 7 from Aug. 1.

“On the part of the Philippine government, we will continue with our talks with the US and hopefully we can come up with a mutually beneficial deal the soonest possible time,” Trade Secretary Cristina Roque said in a Viber message yesterday.

 For exports coming from the Philippines, the new tariff is at 19 percent, lower than the 20 percent announced last month, but higher than the 17 percent unleashed in April. 

At present, Philippine goods entering the US are slapped a 10-percent levy as US President Donald Trump earlier declared a pause on tariffs while negotiations with trade partners are taking place.

Roque said the government is ready to provide assistance to exporters who will be affected by the new US tariff.

“We will continue to expand our trade network to provide more business opportunities and enhanced market access for our exporters,” she said.

Roque told reporters on the sidelines of the National Retail Conference and Expo that the government is also prepared to help exporters find other markets, both locally and globally.

“In the local market, definitely, they’ll be able to get opportunities,” she said, noting that exporters are already complying with stringent standards set by the US and other markets they serve.

According to Roque, the Department of Trade and Industry (DTI) also continues to push for free trade agreements (FTA) to expand the markets for Philippine businesses.

The DTI chief said the Comprehensive Economic Partnership Agreement with the United Arab Emirates is already done and just needs to be signed.

In addition, the DTI is aiming to complete the negotiations for an FTA with Chile this year and is exploring a possible trade deal with Israel.

“We also have to think that the US is not the only market in the world. The whole world, these are markets,” Roque said.

Meanwhile, the Department of Finance clarified that the 19-percent tariff on Philippine exports to be imposed by the US does not apply to all products, as the levy is limited to specific goods.

 Finance Undersecretary Domini Velasquez said the reciprocal tariff does not cover all goods, adding that the average duty is actually much lower. 

“So when you calculate the average tariff, the current I think is actually 6.3 percent or something is the average tariff. So it depends on the exemptions, we do not know the details of other countries,” Velasquez told reporters. 

Velasquez said it is difficult to focus solely on the 19 percent rate because some major exports, like semiconductors, are still exempted. 

She added that due to these exemptions, the effective tariff on overall Philippine exports could be significantly lower, but a full analysis will only be possible once the complete details are available. 

“The agricultural goods, it’s very important that it is spared because you’re already competing with these already. Soy and wheat are very limited and pharmaceuticals, we also need it to lower inflation,” she said explaining the zero tariff on chosen US goods. 

Velasquez said the impact of the tariff on the country’s gross domestic product is “very limited” since the Philippines exports less of the affected products compared to other countries that sell the same goods.

 According to the Philippine Statistics Authority, the US emerged as the country’s top export destination in May, accounting for $1.1 billion or 15.3 percent of the total exports.