SO, UNITED States’ President Donald Trump has announced a 20% tariff on Philippine exports to the United States. This was done in the midst of negotiations, and has made our leaders to be concerned over the US administration’s actions.
Personally, I think it’s because Trump is tired of waiting. He wanted a trade deal and we haven’t reached that point yet.
The good news is that we are a service economy, so a tariff on our products will not be that serious (still pretty bad though). Compared to China, Japan and other export-oriented countries, only about 16% of our economy is manufacturing and an even smaller portion of that will be for export to the United States.
Trump’s issue is that everyone wants to sell products to America at the expense of manufacturing. Trade imbalances between two ordinary countries, under normal circumstances, tend to be minimal, because of balance of payments, but trade with the US is anything but normal, and the Americans via Trump are weary of it. Thus, we have the tariffs as a negotiating tactic to bring trade surplus nations to the bargaining table, which happens to include us.
However, it’s not tariffs that we should be worried about. The real pain can come from taxes on remittances, which a large portion of Filipino families rely on. The Big Beautiful Bill had a 1% tax on remittances but many voters want it increased to 5% to 20%. Others want it to reach 100%. It may not be here now, but I think it will come in the future.
Coupled with immigration restriction and tariffs, this will have tremendous effects on our economy. This is why the Philippines should not rely on America and the global economy as sources of economic growth, which we have done for decades.
We must take up as much autarky as we can manage to get away with. We must do this, not as a unilateral whim, but as necessity to a changing world./PN
