Ahead of the effective date of the higher US tariffs on global exports next month, Moody’s Analytics stressed that nations must be mindful that shifts in market strategy entail costly adjustments as buyers and sellers scramble for a solution.
“Businesses that proactively adapt to shifting trade conditions and mitigate emerging risks will be better positioned to navigate ongoing uncertainty,” Choon Hong Chua, senior director of Moody’s Analytics based in Singapore, said.
“While some organizations may consider alternative sourcing options within Southeast Asia, any transition could involve short-term operational adjustments,” Chua said.
The Moody’s advisory came days after the Marcos administration confirmed that the Trump administration will move forward with a blanket 20 percent tariff on Philippine exports to the United States, set to take effect on Aug. 1, 2025.
The new rate is higher than the 17 percent initially announced for the Philippines in April.
Chua said local exporters must prepare for increased supply chain complexity.
“Philippine exporters may face increased costs and heightened uncertainty in accessing the US market, which could lead to reduced demand and intensified competitive pressures — particularly if higher costs are passed on to consumers,” Chua said.
Talks with Washington
The Philippine government has assembled a negotiating delegation to press for tariff concessions or a possible rollback.
The team, led by Special Assistant to the President for Investment and Economic Affairs Frederick Go and Trade Secretary Cristina Roque, is expected to travel to Washington this month to engage their counterparts.
They want US trade officials to recommend reducing the tariff rate, or seek exemptions for critical export segments. The Department of Trade and Industry has yet to confirm whether bilateral discussions have begun
Contingency planning
Moody’s stressed the urgency of contingency planning, warning that delaying action until the outcome of negotiations may expose exporters to operational and financial risks.
“It will be prudent for Philippine exporters to start assessing supplier strategies now,” Chua said.
The 20 percent blanket tariff on Philippine exports to the United States brings another layer of complexity to global supply chains, Moody’s noted.
“Philippine exporters may face increased costs and heightened uncertainty in accessing the US market, which could lead to reduced demand and intensified competitive pressures — particularly if higher costs are passed on to consumers,” Chua stressed.
Some buyers may consider sourcing alternatives within Southeast Asia, though any shift is likely to involve short-term operational adjustments related to the complex trade landscape introduced by the US government.
“Maintaining supply chain visibility and agility, Chua said, ”is key to withstanding shifting trade conditions.”
Growing pressures
The US has long been one of the top markets for Philippine exports, particularly in electronics, apparel, processed food, and intermediate goods.
Analysts warn that the 20 percent tariff — if fully passed on — could undermine pricing power and trigger shifts in buyer behavior.
Exporters may also need to absorb additional logistical costs or divert shipments to alternative markets such as Vietnam, Mexico, or Asean trading partners, where tariff barriers are lower.
The trade and industry officials have not yet issued updated estimates on potential losses or sectoral impact, but business groups have raised concerns over order cancellations and supply chain rerouting ahead of the August 1 deadline.
