Let’s make a deal

There’s a popular television game show called “Let’s Make a Deal” which has continued to be broadcast since time immemorial. Like the game show, it’s when you make a deal that technically gives you the feeling of winning. Most everyone has also heard, and many have probably read, President Trump’s book, “The Art of the Deal.”

Written in a very conversational tone, the book – which I have read myself – contains anecdotes about his childhood, the influence that his father Fred (who is himself a successful busi-nessman) had on him growing up, his deal-making strategies and views on the art of negotiation, his belief in risk taking and making bold decisions, the importance of thinking big and his formula in becoming a good negotiator to achieve success in business.

In his book, President Trump disclosed: “My style of deal-making is quite simple and straightforward. I aim very high, and then I just keep pushing and pushing and pushing to get what I’m after. Sometimes I settle for less than I sought, but in most cases I still end up with what I want.”

And this is what the whole world is seeing now with the imposition of tariffs, which President Trump had described during his first term as “the greatest negotiating tool” in the history of the United States.

Earlier this week, President Trump sent letters to many countries informing that, starting Aug. 1, they will be subject to new reciprocal tariff rates “designed to make the terms of bilateral trade relationships more reciprocal over time and to address the national emergency caused by the massive US goods trade deficit” as explained by the White House.

Based on television interviews as far back as the early ’90s, President Trump always believed the trade deficit was, and is, proof that America has been taken advantage of by other countries. Not surprisingly, analysts see “The Art of the Deal” to be reflective of his “America First” policy which, to a certain extent, is self-explanatory.

Obviously, many countries are dealing with the new tariffs and the Philippines is no exception – and so we are faced with making a deal with the United States.

Presidential Assistant for Investment and Economic Affairs Frederick Go expressed concern over the US decision to impose a tariff rate higher than the original 17 percent announced in April, but still maintained an optimistic outlook. 

“The fact remains, however, that the 20 percent rate is the second lowest among all reciprocal tariffs that the US has imposed on the region, the lowest being the 10 percent of Singapore,” Secretary Go said. Goods from Laos and Myanmar, for instance, are being levied with 40 percent while Cambodia and Thailand both have a 36 percent tariff. Meanwhile, both Indonesia and Malaysia have 32 percent.

Additionally, semiconductors, which are our top export to the US, have been exempted from the new tariffs, Secretary Go also explained.

Understandably, many of our exporters are anxious and some are probably panicking, but we are fortunate to have a very good team in place with Secretary Go, Trade Secretary Cristina Roque and Undersecretary and Board of Investments head Perry Rodolfo who are flying to Washington to hold talks with their counterparts to seek a bilateral comprehensive economic agreement or a possible Free Trade Agreement (FTA) for a more sustainable and equitable trade partnership. If one will recall, President Trump was receptive to the idea of an FTA when he visited the Philippines in 2017.  

We also have experienced business tycoons who are helping in the background, providing inputs and information that will help President Marcos make the right decisions.

As I said during the recent US-Philippines Business Forum themed “Bridging Nations: Strengthening US-Philippines Economic Ties” organized by the Philippine American Chamber of Commerce of Metro Washington DC and the US-Philippines Society which we hosted, it is in our mutual interest to capitalize on the strong convergence of economic interests between our two countries, as investing in our alliance makes both countries safer, stronger and more prosperous.

An economically strong Philippines is a strong partner and ally of the US, and the more prosperous we become, the more we can invest in our defense, giving us the capability to become an equal partner and reliable ally of the United States. After all, economic and defense security are two sides of the same coin. 

Recent developments have been promising, such as the signing between Transportation Secretary Vince Dizon and US Trade and Development Agency (USTDA) Acting Director Thomas Hardy of a technical assistance grant that will fund the pre-feasibility studies for the flagship Subic-Clark-Manila-Batangas Railway Project along the Luzon Economic Corridor.

The grant – which was one of the first to be green-lighted following the US government’s foreign assistance review – underscores the strong alliance between the US and the Philippines as the railway project will result in increased economic cooperation through the development of an “essential trading route that will mutually benefit American and Philippine citizens,” as noted by Director Hardy.

Let’s not panic. We should work on improving trade relations not only with the US but with other countries, including China, continuing to find ways to pursue economic ties with our neighbor despite the fact that there are still many issues to resolve. 

We should approach the emerging US tariff policy with the positive perspective that we can clinch a good deal with our trading partner by negotiating for mutually beneficial outcomes.

As summed up by President Trump in his book: “Deals work best when each side gets something it wants from the other.”

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