The 17 percent reciprocal tariff considered for imposition by the US on Philippine products will potentially cost American buyers an estimated $1.8 billion a year, a study made by a trade expert and former official said.
Former Trade Undersecretary Rafaelita Aldaba said her study assumed the tariff on Philippine goods would be 17 percent when the current 90-day pause announced by Washington on April 9 ends.
She used the baseline value of Philippine exports to the US at $14.98 billion in 2024.
Aldaba simulated the impact of the 17 percent tariff and shared her findings with the Philippine Manufacturing Team, an information sharing platform of manufacturers, policy makers, researchers and members of the academe.
She determined that the $1.8 billion represents the tariff cost, or the 17 percent tariff on goods.
Before the administration of US President Donald Trump assumed office on January 20, certain products entered the US at zero tariff, mostly electronics and semiconductors.
But now all imported products entering the US will have to pay a 10 percent baseline tariff.
Tariff exemptions
Strategic exports by the Philippines to the US used to enjoy tariff exemptions, with high-value products shielded from any tariff escalation such as integrated circuits and transistors covered by previous agreements.
Aldaba said there is now a pressing need for the Philippine government to seek exceptions for these goods.
Incumbent Trade Secretary Cristina Roque, asked if the Philippines would seek an exemption for semiconductors, said the Department of Trade and Industry (DTI) would always always be negotiating for the best deal for the country.
“That’s what we really want to happen,” she said.
“For the semiconductors — it’s still business as usual because (some companies) already have orders.They’re already being shipped,” Roque said in a separate interview in Makati City on Tuesday.
‘Just waiting’
On preparing for the time Trump’s reciprocal tariffs actually take effect when the 90-pause ordered by Trump on April 9 is over, Roque said the Philippines is “just waiting for a meeting” with her counterpart at the US Commerce Department.
“Once we get the meeting, we will also talk about it, because we can’t… we don’t want to hide this. This is something that we need to tell the Filipino people about,” the trade secretary said.
“Globally, everyone’s waiting for this, not just us. For now, it’s 10 percent for everyone for 90 days. After the 90 days, we will see what the tariff is. We don’t know what will happen after 90 days. So it’s hard to speculate until we get to talk to my counterpart there in the US. The best is really to just wait,” she added.
Trade Undersecretary Allan Gepty said the department is closely monitoring and assessing the tariffs’ impact, while another official said the Board of Investments is still doing some number-crunching.
PH ‘least exposed’
In her research, Aldaba said among the five Asean countries, the Philippines is the least exposed to a tariff fallout.
She compared the Philippines 17 percent with Vietnam’s 46 percent, Thailand’s 36 percent, Indonesia’s 32 percent, and Malaysia’s 24 percent. The tariff rates were as announced by the White House on April 2.
Aldaba said the Philippines has a low tariff exposure, or a low degree of vulnerability under America’s reciprocal tariffs regime.
“The Philippines faces the lowest reciprocal tariff rate and about 30 percent of its US exports are exempted, especially high-value electronics and semiconductors,” she said.
The non-exempt goods such as garments, processed foods, and wood products still account for about 12.4 percent of total exports. These are low margin, labor-intensive products that do not have a commanding influence on the value of the country’s total trade with the US.
Those factors make the Philippines well-positioned to attract investors relocating from high-tariff countries, particularly in price-sensitive, export-oriented sectors such as apparel, furniture, and food processing, Aldaba said.
