PH to suffer from Trump’s ‘Tariff War’—ACPSSI

DESPITE the country being the United States’ “closest ally” in the ASEAN region, it would not be spared from the ‘Tariff War’ that US President Donald Trump is pursuing against all countries in a bid to protect the US economy under his ‘Make America Great Again’ (MAGA) policy.

This according to Herman Tiu Laurel, president of the Asian Century Philippines Strategic Studies Institute Inc. (ACPSSII), who is also a columnist of this paper.

“With the Philippines traditionally enjoying preferentially higher tariff on U.S. imports to the country, reciprocal tariff from the U.S. will hit it much harder than other countries that never enjoyed special privileges from the U.S., Laurel said in a statement.

Under Trump’s policy, the United States would impose the same tariff rates to countries it had given preferential rates to boost their economies.

This is aside from Trump’s use of tariffs to not only protect American jobs but also for domestic political purpose such as his war on drugs.

Already, the US has imposed a 20 percent tariff on Canada and Mexico and 25 percent tariff on Chinese goods for these countries’ alleged failure to control the entry of illegal drugs into the United States, particularly, Fentanyl and the chemicals to produce them.

“The Philippines is facing a rising trade tariff wall in the U.S. while increasingly constricted in the China market as tensions with the giant Asian economic giant continue to be stoked by President Bongbong Marcos, Jr., raising the anti-China propaganda decibels in-aid-of-election propaganda tagging the opposition Duterte-PDP senatorial slate as ‘pro-China,’” Laurel added.

He warned the “trade wallop” against the Philippines—rising tariffs from the United States and shrinking presence in the China market—due to President Marcos’ “acquiescence” to America’s use of the South China Sea issue thru an “assertive transparency campaign” against China to “exact reputational costs” against the world’s largest market.

Laurel noted that the country’s top exports to the US in 2024, Integrated Circuits, Insulated Wire, Telephones and Electrical goods have grimmer prospect in the US market as Trump intends these goods to be “reshored” back to the US mainland where they are to be produced by US-based companies.

Meanwhile, export of Philippine goods to China, particularly fruits and other agricultural goods continue to shrink. From among the Top 3 exporters to China in 2019, the Philippines is nowd down to fifth place, having been overtaken by Vietnam and New Zealand.

“The Asian Century Philippines Strategic Studies Institute Inc. (ACPSSII) is sounding the alarm to call attention to the trade catastrophe the Philippines will be heading towards in the years ahead unless and until it changes course in its trade and foreign policies towards refocusing on and prioritizing trade development and deescalating geopolitical tensions,” Laurel said.

“The US is launching a new wave of predatory protectionism. This includes tariffs that hurt allies, threats to trade institutions like the World Trade Organization (WTO), and even neocolonial expansionism in territories such as Canada and Greenland.”

“Meanwhile, China continues to offer to meet the Philippines on contentious issues facing both countries. China remains willing to open its market for the Philippines’ traditional and non-traditional goods,” Laurel said.

“The Philippines needs to recognize the benefits of China’s economic model,” Laurel said in an interview by The Manila Times.

“Neighboring Asean countries are thriving by securing joint ventures in electric vehicles, renewable energy, and industrial manufacturing.

“Meanwhile, the Philippines is sidelining itself by aligning too closely with the US, which offers little in return,” Laurel noted.