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US President Donald Trump set at 20% the tariff on Philippine exports to the US effective August 1
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The Philippines is one of seven countries that received a letter from Trump on July 9 announcing new “reciprocal tariff” rates
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The Philippine Department of Trade and Industry expressed concern on the new rate despite efforts and constant engagements
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A Philippine delegation is scheduled to hold discussions in the US next week, ahead of the tariff’s implementation on August 1
US President Donald Trump has set to 20% the tariff on Philippine exports to the US starting August 1.
In a letter to Philippine President Ferdinand Marcos, Jr. dated July 9, Trump said the relationship between the US and the Philippines “has been, unfortunately, far from reciprocal” but that the former has “agreed to continue working with the Philippines, despite having a significant Trade Deficit.”
In his letter posted on Truth Social, he said the tariffs are “necessary to correct the many years of the Philippines Tariff, and Non-Tariff, Policies and Trade Barriers, causing these unsustainable Trade Deficits against the United States. This Deficit is a major threat to our Economy and, indeed, our National Security!”
The 20% rate is higher than the 17% earlier set that was supposed to take effect on April 9.
Trump later suspended implementation of the reciprocal tariffs to July 9 to allow more time for negotiations.
The Philippines is one of seven countries that received a letter from Trump on July 9 announcing new “reciprocal tariff” rates, following the initial set of 14 countries that will also be facing new rates starting August 1. The six other countries are Brunei, Moldova, Algeria, Iraq, Libya and Sri Lanka.
The White House earlier said the new reciprocal tariff rates are “designed to make the terms of our bilateral trade relationships more reciprocal over time and to address the national emergency caused by the massive US goods trade deficit.”
So far, the Philippines has the lowest reciprocal tariff of 20% amongst those that recently received letters; other countries have been slapped tariffs ranging from 24% to 48%.
Philippine ambassador to the US Jose Manuel Romualdez told Reuters in a report that the Philippines is still planning to “negotiate that (tariff) down.”
In his letter to Marcos, Trump said the new 20% tariff rate on Philippine exports to the US is separate from all sectoral tariffs.
“Please understand that the 20% number is far less than what is needed to eliminate the Trade Deficit disparity we have with your Country,” Trump said.
He added that goods transshipped to “evade a higher Tariff will be subject to that higher Tariff.”
If the Philippines decides to raise its tariffs on the US, Trump said such rates will then be added onto the 20% that the US will be charging.
“If you wish to open your heretofore closed Trading Markets to the United States, and eliminate your Tariff, and Non-Tariff, Policies and Trade Barriers, we will, perhaps, consider an adjustment to this letter,” Trump said, adding that the tariff may be modified depending on the US’ relationship with the
Philippines.
He added that no tariff will be imposed “if the Philippines, or companies within your Country, decide to build or manufacture product within the United States and, in fact, we will do everything possible to get approvals quickly, professionally, and routinely – In other words, in a matter of weeks.”
DTI statement
The Department of Trade and Industry in a statement on July 10 expressed concern that despite “efforts and constant engagements, the US still decided to impose a 20% tariff on Philippine exports.”
Still, it noted that the 20% rate of the Philippines is the second lowest among reciprocal tariffs the US has imposed on countries in the region. Singapore currently a 10% rate while Vietnam also has a 20% tariff rate—down from the initial 46%–after it struck a deal with the US recently.
“More importantly, as a reliable and strategic economic partner of the US in the region, the Philippines remains committed to continuing negotiations in good faith to pursue a better and more comprehensive bilateral trade agreement,” DTI said.
“We recognize the concerns of the United States regarding trade imbalances and its desire to strengthen domestic manufacturing. However, global supply chains are deeply interconnected, and unilateral trade impositions will have adverse effects to the global economy. Thus, we believe in the need for constructive engagement to address trade issues,” the trade department stated.
In consultation with other government agencies, DTI said it will continue to actively engage with its US counterparts “toward a balanced and mutually beneficial trade relationship.”
A Philippine delegation is scheduled to hold discussions in the US next week, ahead of the tariff’s implementation on August 1.
“In light of this development, the Philippines remains steadfast in advancing key economic reforms to sustain a competitive and investor-friendly business environment, while broadening its trade partnerships to create more market opportunities,” DTI said.
Special Assistant to the President for Investment and Economic Affairs Frederick Go, in a press briefing on July 10, noted that currently, most semiconductor and electronics exports, which are the Philippines top exports to the US, are exempted from tariff.
