Analysts urge trade strategy recalibration given new Aug deadline
The Philippines remains in a “good place” in its trade discussions with the United States, Malacañang said on Tuesday after the White House extended the suspension of higher reciprocal tariffs until August 1—giving affected countries more time to renegotiate key terms.
“The Philippines and the US had an agreement for economic cooperation,” Palace Press Officer Claire Castro said in a briefing. “There’s no final decision or announcement yet from the US, but based on the update from Special Assistant to the President for Investment and Economic Affairs Frederic Go, the negotiations are still ongoing.”
This comes after US President Donald Trump signed an executive order on July 7 (July 8 Manila time) that postponed the expiration of current tariff rates, originally set to end on July 9.
Analysts said the move gives the Philippines breathing room, but also heightens the stakes.
“This extension buys the Philippines time to recalibrate and renegotiate trade terms,” John Paolo Rivera, research fellow at the Philippine Institute for Development Studies, said. “But it also raises the pressure. If other regional players secure more favorable deals, we risk losing competitiveness.”
Rivera said the US is clearly pivoting toward tougher trade enforcement, with new reciprocal tariff letters already sent to countries like Myanmar and Laos (40 percent), Cambodia and Thailand (36 percent), Indonesia (32 percent), Malaysia (25 percent), and Bangladesh (35 percent). The Philippines is currently facing a 17-percent reciprocal tariff.
To safeguard market access and retain investor confidence, Rivera said the Philippines must now focus on three key fronts:
• Proactively engage US officials to protect major exports like electronics, garments, and agri-products;
• Accelerate bilateral trade discussions or strengthen its standing under programs such as the Generalized System of Preferences (GSP);
• And reinforce local value chains to withstand external shocks and remain globally competitive.
He added that developments in neighboring countries could reshape the region’s trade dynamics.
Reuters earlier reported that the US agreed to impose only a 20 percent tariff on Vietnamese exports—lower than initially planned—and Vietnam, in return, will import American goods with zero duties. Thailand has also submitted a fresh trade proposal offering to cut US-bound tariffs to avoid a looming 36-percent levy on its own exports.
“If Thailand or Vietnam get exemptions or favorable terms, they’ll gain an edge—especially in sectors where we compete directly like electronics, garments, and auto parts,” Rivera said.
At the same time, he noted that if tariffs hit major competitors harder than the Philippines, the country could benefit from trade and investment diversion—but only if it improves logistics, compliance, and ease of doing business.
“Sustained gains will depend on how fast we move, and how well we align with Asean for a united front,” he added.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the US tariff strategy hinges on trade imbalances—whether a country runs a surplus or deficit with the US—and is being used as a negotiating lever.
He said the Philippines must stay engaged with Washington to work toward a longer-term solution such as a free trade agreement (FTA), especially since the US remains the country’s top export market, accounting for 17 percent of total outbound shipments.
“An FTA could provide structural relief from these reciprocal tariffs,” Ricafort said. “At the same time, we should diversify Philippine exports to more markets worldwide to reduce reliance on any single partner.”
In April, Trump announced a sweeping policy imposing parallel tariffs on all nations exporting to the US. The rollout was paused for 90 days, with a 10 percent baseline tariff enforced during that window.
President Ferdinand Marcos Jr., during the 46th Asean Summit in Malaysia last month, raised concerns about the ripple effect of the US tariff move on both regional and global economic stability. He called for stronger coordination and deeper integration among Asean economies to cushion the impact.
