Trump Slaps 17% Tariff on PH: Next Steps for DTI

The Department of Trade and Industry is exploring options for managing the 17% tariff on Philippine goods. 

The Philippines was not exempted from the reciprocal tariffs United States President Donald Trump announced over the weekend. In fact, Trump slapped a 17% tariff on Philippine goods. 

In response to the tariff, the Department of Trade and Industry (DTI) is now exploring its options amidst worries and concerns over the possible effect on Philippine industries and businesses. 

The 17% tariff is one of the lowest in Asia. In comparison, neighboring countries Singapore and Vietnam have been slapped with 46% and 10% tariffs, respectively, according to a report. 

According to data from the Philippine Statistics Authority (PSA), the US was the Philippines’ third-largest trading partner last year. 

Is a trade war looming on the horizon?

Last month, trade and development economist Annette Pelkmans-Balaoing discussed the effects of Trump’s tariffs on the Philippines, saying that “If the Philippines and other countries retaliate with countermeasures such as tariffs on U.S. goods or restrictions on market access, it could escalate into a full-scale trade war.”

“This could disrupt global supply chains, especially in sectors like electronics and intermediate goods, where Philippine exports are deeply embedded in multinational production networks,” Pelkmans-Balaoing added. 

The economist likewise pointed out that “A prolonged trade war would deter foreign investment, weaken global demand, and put pressure on Philippine households and businesses through higher prices.”

Should the Philippines be worried?

Malacañang has already claimed that the tariff will have a “very minimal” impact on the economy due to the fact that the Philippines “does not export much to the US.”

DTI Secretary Ma. Cristina Roque released a statement on April 4 echoing the same statement, noting that it will not affect the Philippines the same way it will affect other countries. 

The agriculture sector, on the other hand, is still waiting to see how the tariff will impact the country’s exports, particularly semi-processed goods like coconut oil and canned pineapple that are exported to the US. 

“It remains to be seen yung concrete impact sa agri sector, but we are not a major export player in the livestock industry or agriculture in general,” agriculture industry group SINAG Executive Director Jayson Cainglet said, according to a separate report. 

“We await yung impact sa feeds and farm inputs since countries like China had imposed retaliatory tariffs sa US,” he added. “But more than these developments, Trump’s action speaks volumes in protecting domestic markets by making imported goods more expensive, thus encouraging local purchases and development of local agriculture.” 

Former Department of Agriculture (DA) undersecretary and former member of the Monetary Board V. Bruce Tolentino has likewise pointed out that the Philippine government can use this as an opportunity to negotiate a trade deal that will be beneficial to both countries. 

What DTI is planning to do about the tariff 

Amidst the concern over Trump’s tariffs, Secretary Roque has revealed that the Philippines will consider cutting the tariffs on products coming from the US, adding that the government is “definitely” open to the idea. According to Roque, she is set to meet with her US counterpart in order to start with the trade talks. 

She likewise stated that she will work with other members of the Association of Southeast Asian Nations (ASEAN) to determine the best course of action to take regarding the tariffs. 

“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,” she said in her April 4 statement. “This will allow both sides to pursue mutually beneficial trade.”