Mixed signals

Three weeks after that photo-op visit of BBM with Trump at the White House, we still have no idea what were the details of the tariff agreement he shook hands with Trump on, beyond the 19 percent tariff rate.

While Philippine officials say the duty-free entry of US products is limited to cars, soy, yellow corn, wheat and pharmaceuticals, there is no public clarification from US officials regarding the details or exceptions.

Trump’s announcements suggested broad zero tariffs on US goods, without outlining exclusions like those highlighted by Philippine officials.

Joey Salceda, who was in Washington DC at that time kibitzing in the talks, said the Philippines’ current offer to reduce or eliminate tariffs on selected US agricultural exports remains under consideration and has not yet been formalized.

Still, Salceda insists that BBM and his negotiators managed to reduce the overall impact of the Trump-announced 19 percent tariff rate to an effective rate of just over six percent.

But not one of the main negotiators has confirmed Joey’s supposition of a six percent effective tariff rate. In other words, we are stuck with 19 percent and no exclusions on duty-free entry of US exports to the Philippines until further notice.

The US trade negotiators may not have the time or the inclination to clarify soon. They are also afraid of misreading Trump.

Indeed, even Japan, a very important trade partner, isn’t getting clarity. According to the Washington Post, frustration is mounting in Japan after it realized that Tokyo and Washington have different interpretations of a key component of their new trade deal.

Japanese lawmakers are asking questions and tensions are running so high that Prime Minister Shigeru Ishiba had to try to explain the unusual, vague deal his government struck with Trump on July 23.

“The other party [Trump] is not a normal person,” Ishiba told frustrated lawmakers in a session at the Japanese parliament. Ishiba, according to the Washington Post, explained that his counterpart doesn’t play by the rules of conventional trade agreements and unilaterally changes the rules.

“In negotiations like this, implementation is far more difficult than reaching an agreement,” Ishiba complained.

Apparently, when Japan and the US announced they had reached a trade deal, it was essentially a handshake agreement. “With no provisions committed to a formal document, the fact sheets that both governments released have conflicting information,” the Washington Post reported.

Both countries said the United States would impose a 15 percent tariff on goods from Japan. Tokyo said any item already subject to tariffs higher than 15 percent would be exempt from the new taxes. But the executive order Trump signed last week suggested the rate would be applied on top of existing levies, including beef, which faces a 26.4 percent tariff.

Ryosei Akazawa, Japan’s chief trade negotiator, traveled back to Washington last week to try to sort out the discrepancy, the Post reported. But just after he landed, the US interpretation was published in the Federal Register.

Akazawa subsequently announced that the two sides had agreed to Japan’s interpretation. But there was no confirmation from the White House.

Japan’s experience revealed the fragility of agreements with the Trump administration and how “incredible, untrustworthy” Washington can be, said Ryo Sahashi, an international politics professor at the University of Tokyo’s Institute for Advanced Studies on Asia as quoted by the Post.

Then it got more complicated. Trump announced a 100 percent tariff on “all chips and semiconductors” but he would exempt companies that have plans to transition their manufacturing to the US.

The Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI) said the proposed 100 percent tariff on semiconductors entering the US market would be “devastating” to Philippine exporters.

Before Trump’s announcement, Special Assistant to the President for Investment and Economic Affairs Frederick Go said that semiconductors and electronics were exempted from reciprocal tariffs.

That’s what Joey is also saying: “electronics, wood, metals, fuels, and chemicals – are covered by multiple trade agreements for exemptions.”

The Philippines indeed enjoys exemptions on sectors such as electronics and semiconductors – notably covered by agreements like the WTO’s Information Technology Agreement (ITA) and specific provisions under Annex II of Executive Order 14257 (April 2, 2025).

Besides, Salceda pointed out, that the top semiconductor producers operating in the Philippines already meet the conditions outlined by the Trump administration. These companies include Texas Instruments, Analog Devices, AmKor Technology, STMicroelectronics and ON Semiconductor.

These companies are either headquartered in the US, operate manufacturing facilities there or function under US licensing and regulatory control. Their Philippine operations are part of secure, vertically integrated global supply chains that serve US industrial policy objectives.

If that is so, why is SEIPI, the trade organization of our semiconductor exporters so nervous? Possibly because the claims of Salceda must still be validated by US officials.

According to Dr. Rafaelita Mercado Aldaba, emeritus research fellow at PIDS, we send 20 percent of our exports to the US valued at $14 billion. These are largely concentrated in electronics such as semiconductor media, storage devices, and ICT (information and communications technology) parts.

Hindi tayo nag-iisa. Trump early last month announced that he had negotiated a 20 percent rate with Vietnamese negotiators. Except, it turned out that the Vietnamese believed that they had negotiated an 11 percent rate.

Other countries – including India, South Korea and others that secured temporary relief – are frustrated by the vague, non-binding nature of many Trump-era “deals,” which lack legally enforceable terms and are frequently reversed or reinterpreted.

Mixed signals appear to be intentional. Experts broadly agree that the ambiguity in Trump’s trade deals is not accidental. His style blends game theory, negotiation strategy and the psychological power of unpredictability to maintain leverage and flexibility.

And the rest of the world is expected to take it all in to appease Trump, the emperor of the world.

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco