PH runs out of bargaining chip in fresh tariff talks with US - exporters

Manila, Philippines – The Philippines could be running out of a bargaining chip to sway US President Donald Trump into lowering his stiff tariff on Philippine exports as President Ferdinand Marcos Jr.’ trade negotiators prepare to reopen talks in Washington next week, an industry official said on Thursday.

Trump’s July 9 letter to Marcos – which reset Washington’s tariff on Philippine-made goods entering its borders to a higher 20 percent from the 17 percent initially announced in April – minced no words when it stated that the Philippine-US “relationship has been, unfortunately, far from reciprocal.”

US goods sold in the Philippine market are levied 34 percent, almost twice Trump’s new tariff rate. Trade between Manila and Washington is on a deficit, favoring the former with more Philippine exports sold to Americans.

That July 9 Trump letter signaled earlier negotiations between the two nations held in Washington between April and May have failed.

When asked by journalists what went wrong in the first round of talks, Marcos’ economic and investment adviser, Frederick Go, said “there was some posturing here.”

Go and trade officials led by Secretary Cristina Roque will return to the White House next week with at least two proposals: lower tariff or a bilateral comprehensive economic agreement.

“The discussion on the reciprocal tariff is just stage one,” Go told a press briefing early Thursday.

“There’s still stage two which is the bilateral partnership agreement that we seek. This is the more important thing for us,” he pointed out.

But Philippine Exporters Confederation, Inc. (Philexport) President and CEO Sergio Ortiz-Luis, Jr. said the Philippines could be losing its leverage to gain concessions.

“The others, when they negotiate, have something to offer like Vietnam. We don’t have anything to offer anymore because we have given it to them (Washington) everything already,” the Philexport official told NewsWatch Plus in an interview.

“The geopolitics issue here is using dollars - we would have joined BRICS. More than that, we gave them [military] bases, we are buying equipment from them, even putting a reserve ammunition plant,” he explained.

Ortiz-Luis said if the Philippines offers concessions in agriculture, “that will be worst.”

Apart from semiconductor chips and electronics products - which are the country’s top exports to the US - the Philippines also exports coconut, pineapple and bananas.

The government should look at the latest trade row as a “sign that they can’t keep ignoring the export” sector, the industry official said.

The export industry is in a quandary as to how to deal with higher US tariffs and will remain on a wait-and-see mode, Philexport said.

Trump’s sweeping “Liberation Day” tariffs take effect on August 1.