Crumbs

In his characteristically crude manner, Donald Trump boasted a few weeks ago that foreign leaders were lining up to “kiss (his) ass” and plead for trade deals.

Since then, he has so far failed to nail down any real agreements, properly detailed and documented. What we know of the results of negotiations with no more than a dozen countries are Trump’s own wild interpretations released through his social media posts.

When Trump announced “reciprocal tariffs” on April 2, he managed to shock the world.

Then he backed down. Just days after, he postponed implementation of his unilateral tariff schedules by 90 days.

In the first week of this month, when those tariffs were supposed to come into effect, he announced a new deadline of Aug. 1. That happens next week. The markets are betting there will be another postponement.

Trump uses the threat of unrealistic tariff rates to bully every other nation on earth and grab everything on the table. Leaders of other nations have since learned how to cope with bullying by alternately flattering and frustrating the volatile US leader.

This week, Trump desperately needed a foreign leader to come to Washington and kiss his ass. The deadline he himself set was closing in. His presidency was suffering a serious decline in confidence, abetted by the Epstein scandal.

President Ferdinand Marcos Jr. obliged the flailing American leader. A working visit to Washington was hurriedly put together even if trade negotiations between our two countries had not budged. All he got for the effort were crumbs from Trump’s table.

Hardly any negotiations happened. Trump dictated the terms. We accepted them.

As an afterthought, Trump rewarded Marcos a reduction of one percent for his effort to come to Washington and play fall guy to the American leader. In exchange, Trump claimed all US goods entering the Philippine market will be tariff-free. To top it all, he insulted our President by sarcastically describing Marcos a “tough negotiator.”

Even the one percent tariff “reduction” was duplicitous.

In April, Trump imposed a 17 percent “reciprocal tariff” on Philippine goods entering the US market. By some sleight-of-hand, this rose to 20 percent by the time the Aug. 1 deadline was announced. We were not given the dignity of an explanation on why this came about.

The arithmetic looks terrible for our case.

In April, Trump imposed a 40 percent tariff rate on Vietnam. By July, this has come down to 20 percent. A 20-point reduction.

In April, Trump imposed a 32 percent tariff rate on Indonesia. By July, this has come down to 19 percent. A 13-point reduction.

In April, Trump imposed a 17 percent tariff on the Philippines. By July, after Marcos’ visit, this went up to 19 percent. A two-point increase.

Everything, of course, becomes sound and fury signifying nothing should Trump eventually chicken out on the tariffs – as Wall Street is betting. The world will have been taken on a rollercoaster ride in the reality-show chaos that is the Trump administration. Trump, with his obviously declining cognitive powers, still manages to humor us. Yet we willingly play the role of village fool.

Nevertheless, the administration propaganda machine has gone full blast celebrating the “gains” from Marcos’ Washington visit. We are told that zero tariffs on imports from the US will benefit the Filipino consumer and that the tariffs imposed on our exports will be paid by the American consumers.

If this is so, why did we bother with a presidential visit to Washington in the first place? We could have signed the instruments of unconditional surrender from the comforts of our flooded city and announced it on X.

Instead of smart-alecky propaganda dispensed by our own government, we should examine the complex consequences of Trump’s trade war. This is a war where no nation is considered an ally. It is a strategy that completely loses sight of how the world has changed and how it is shaped by American unilateralism.

Every tariff imposed by any nation adds to the friction in global trade. Such friction prevents consumers everywhere from enjoying the advantages offered by supply chains that enable goods to be made at least cost and sold at lowest price.

By waging his trade war, forcing industries to “re-shore” and nations to trade less, Trump is creating a world of inefficiency and an economy of obsolescence. This will prevent the world from addressing poverty and nations from finding their niches in the global value chain.

This trade war, even if not of our own making, will take a toll on our propensity for growth. Fitch Solutions and other notable economic research outfits have downgraded Philippine growth forecasts to 5.4 percent. This is due mainly to the effects of tariffs on our exports.

Add the effects of the natural calamities we are now enduring. We will be lucky to make five percent this year. We are already reaping the ill-effects of the trade war even as Trump’s tariff schedules continue to shift.

The world will survive Trump, to be sure. Trade patterns will be dramatically reconfigured to follow the paths of least cost and best outcomes. That reconfiguration will benefit China in the long term because it designates itself the new paragon of free trade.

But even here we will be disadvantaged, having aligned ourselves too closely with a chaotically declining superpower at war with the world.