PHL Faces 20% US Tariff, Vows Further Talks

By Francis Allan L. Angelo

The Philippine government on Wednesday expressed concern over the United States’ decision to impose a 20 percent reciprocal tariff on select Philippine exports, calling for continued negotiations to ease trade tensions and finalize a comprehensive bilateral agreement.

In a media statement, the Department of Trade and Industry (DTI) said it had received formal notice of the tariff measure and noted disappointment that Washington proceeded with the move despite sustained diplomatic engagement.

“We are concerned that, notwithstanding our efforts and constant engagements, the US still decided to impose a 20% tariff on Philippine exports,” the statement read.

The U.S. government has not publicly specified the affected products but cited the need to correct trade imbalances and promote domestic manufacturing, echoing provisions in its broader “Made in America” policy framework.

The DTI clarified that the 20 percent rate is the second lowest among reciprocal tariffs recently imposed by the U.S. on trading partners in Asia, suggesting the Philippines remains on relatively favorable footing despite the setback.

“More importantly, as a reliable and strategic economic partner of the US in the region, the Philippines remains committed to continuing negotiations in good faith to pursue a better and more comprehensive bilateral trade agreement,” it added.

The Philippines is among several countries recently targeted under the Biden administration’s recalibrated trade strategy, which emphasizes reshoring industrial production and reducing dependency on foreign supply chains.

“We recognize the concerns of the United States regarding trade imbalances and its desire to strengthen domestic manufacturing,” the DTI said, while warning of broader economic consequences.

“Global supply chains are deeply interconnected, and unilateral trade impositions will have adverse effects to the global economy. Thus, we believe in the need for constructive engagement to address trade issues,” it stated.

A Philippine delegation is scheduled to visit Washington, D.C., next week ahead of the August 1 tariff implementation to resume talks with U.S. trade officials and explore possible exemptions or transitional arrangements.

The DTI said it is working in coordination with other national agencies, including the Department of Finance and Department of Foreign Affairs, to align trade diplomacy and economic policy responses.

The Philippines is currently undergoing major trade and investment reforms, including implementation of the Regional Comprehensive Economic Partnership (RCEP), ratified earlier this year, and efforts to secure upgraded preferential trade access under the U.S. Generalized System of Preferences (GSP).

The country is also expanding trade links with South Korea, the European Union, and ASEAN neighbors, in line with its diversification strategy to reduce reliance on any single market.

“In light of this development, the Philippines remains steadfast in advancing key economic reforms to sustain a competitive and investor-friendly business environment, while broadening its trade partnerships to create more market opportunities,” the DTI said.

Philippine exporters have called for clarity on which product lines will be affected, noting that the U.S. remains the country’s top export market, with electronics, garments, food products, and business process outsourcing (BPO) services among the biggest contributors.

Exporters and economists warn that the new tariff could drive up consumer prices and erode profit margins for Filipino firms already dealing with inflation, logistics costs, and supply chain bottlenecks.

Despite the tensions, analysts see the continued dialogue between Manila and Washington as a sign that both parties are open to compromise, particularly as the U.S. seeks to retain its strategic foothold in Southeast Asia amid rising economic competition with China.