The Philippines is in a better position compared to other Asian nations once the reciprocal tariffs that United States will impose globally takes effect.
Under US President Donald Trump’s executive order, Philippine goods entering the US market will be levied 17 percent, still below the tariff for other member-states under the Association of Southeast Asian Nations (ASEAN) like Cambodia at 49 percent, Laos at 48 percent, Vietnam at 46 percent, Myanmar at 46 percent, Thailand at 36 percent, Indonesia at 32 percent, and Malaysia at 24 percent.
US reciprocal tariff on Philippine goods is the second lowest in ASEAN, only above Singapore at a rate of 10 percent.
“We view with guarded optimism that the recent US imposition of reciprocal tariffs will provide strategic opportunities for the Philippines to improve its economic relationship with the US. As we have expected, the Philippines is among the least hit among key exporters to the US,” DTI Secretary Ma. Cristina Roque said in a Viber message to reporters.
“In light of the new tariffs announced, the Philippines can be in a better position than other neighboring countries because of the relatively lower tariffs imposed,” she added.
Reciprocal tariffs on Asian economies were also higher than the Philippines like China at 34 percent, Taiwan at 32 percent, India at 26 percent, South Korea at 25 percent, and Japan at 24 percent.
The new tariffs will be implemented starting April 9, 2025, or what Trump called “liberation day”.
With Trump’s new tariff order, Philippine exports previously enjoying lower or zero tariffs will face a uniform 17 percent tariff when entering the US market. This means Philippine goods will become more expensive in the US and it has potential to reduce revenues and cut workforce for industries reliant on US trade.
The US is the biggest market for Philippine exports, reaching $14.2 billion last year, reflecting an increase of 6.9 percent from 2023. On the other hand, the country imported $9.3 billion worth of products from the US, for trade deficit surplus of $4.9 billion, according to US Trade Representative data.
According to the DTI, the US accounted for 17 percent of Philippine exports in 2024.
Bulk of the Philippine outbound shipment to the US are electronic products, sharing 53 percent of the total exports to the US.
“Overall, about 10 percent of our total trade involves the US,” Roque said.
She said there are Philippine goods exempted from the reciprocal tariffs such as copper ores and concentrates, and integrated circuits, among others.
“We are carefully studying the impact of reciprocal tariffs on agri-based products, particularly food exports noting that these are not covered by the exemptions,” Roque said.
Roque cited another opportunity for the Philippines amid the new tariff imposition.
She said the lower tariff for the Philippines than Thailand will make the former’s coconut products cheaper in the US market. “The task at hand right now for DTI and other government agencies is how to act fast and take advantage of this new development,” she added.
