On the recent imposition of reciprocal tariffs by the US

The Department of Trade and Industry (DTI) is diligently monitoring and assessing the potential impact of the United States’ recent imposition of 17% reciprocal tariffs on the Philippine economy.

While our initial analysis indicates that the direct impact may be less substantial compared to other ASEAN nations such as Vietnam with 46%, Indonesia with 32%, and Cambodia with 49%, we recognize the importance of proactive engagement. The United States remains a crucial export market for the Philippines, accounting for approximately 17% of our total exports as of 2024. Notably, electronic products comprise a significant 53% of these exports, and overall, about 10% of our total trade involves the US.

Specifically, the US plays a vital role as a major source of our agricultural imports, representing approximately 20% of our supply. This underscores their reliability as a partner in ensuring our food security.

In this context, we see an opportunity to deepen our strategic partnership with the US. Our focus is on collaborative efforts to build a secure and resilient supply chain, facilitate the efficient movement of goods, and enhance economic security for both nations. We are also committed to exploring avenues for strengthened food security, expanded market access, and equitable trade.

To further this objective, the DTI Secretary has already expressed her desire to meet with her US counterpart and is currently awaiting schedule to discuss strengthening the trade relations between both countries.

The DTI acknowledges the multifaceted nature of tariff impositions, which can serve various purposes, including protecting domestic industries, generating revenue, reducing input costs, and fostering fair competition.

Given our interconnected global economy, the Philippines believes that clear and predictable trade rules are essential for sustained growth. We are committed to working closely with the United States to uphold these principles and ensure a mutually beneficial trade environment.

• 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.
  • Exporter Additional Tariffs
    • All countries – 10%
    • Cambodia – 49%
    • Laos – 48%
    • Vietnam – 46%
    • Thailand – 37%
    • China – 34%
    • Indonesia – 32%
    • Taiwan – 32%
    • India – 27%
    • Korea – 26%
    • Brunei – 24%
    • Malaysia – 24%
    • EU – 20%
    • Philippines – 17%
    • Singapore – 10%
• It is important to highlight that there are products that are exempted from the imposition of reciprocal tariffs, including product categories that are exported by the Philippines to the US 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.
• The recent US measure has made US imports more expensive so that their domestic manufacturers can compete. Equally important for the US is to improve its access to rapidly growing economies such as the Philippines.
• In this regard, the Philippines aims to actively engage the US in a discussion to facilitate enhanced market access for its key export interests, such as automobiles, dairy products, frozen meat, and soybeans, within the framework of a bilateral free trade agreement. This will allow both sides to pursue mutually beneficial trade.
• 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. Unlike Vietnam (46%), Thailand (36%) and Taiwan (32%)—Philippines (17%) enjoy a lower rate.
• The new tariffs also put Philippines in a more advantageous position more specifically for certain export products like coconuts. With lower tariffs than Thailand, Philippine coconut exports can be more competitive.
• The task at hand right now for DTI and other government agencies is how to act fast and take advantage of this new development. ♦

Date of Release: 04 April 2025