Philippines hopes to further lower tariff rate to around 15%, says ambassador to US

CNA

3 days ago

SINGAPORE: Manila hopes to renegotiate a trade deal it struck with the United States earlier this week that yielded a new 19 per cent tariff rate, said the ambassador of the Philippines to the US Jose Manuel Romualdez on Friday (Jul 25).
'It is clear that we can still renegotiate … The head of our trade team will probably be coming back to Washington DC to see how we can still manage to lower that,' he told CNA.
'President Trump announced that the lowest he will go is 15 per cent to any country, so we're still hoping that we will be able to break down our level of tariff to around the same figure.'
Trump said on Wednesday that the US will settle on a tariff rate of 'anywhere between 15 per cent and 50 per cent' on its trading partners – more than the baseline rate of 10 per cent he had set in April.
It comes as the US has made progress on deals around those numbers, with the Aug 1 deadline for negotiations looming closer.
The new 19 per cent tariff imposed on the Philippines is just below the 20 per cent threatened by Trump earlier this month, but still above the 17 per cent rate he proposed in April under a plan for reciprocal tariffs on dozens of countries.
It matches the 19 per cent rate announced for Indonesia and bests Vietnam's slightly higher rate of 20 per cent. Singapore faces the lowest rate – 10 per cent – in Southeast Asia.
This latest US-Philippines trade was announced on Tuesday following a meeting at the White House between Trump and Philippine President Ferdinand Marcos Jr, who was the first Southeast Asian leader to meet Trump in his second term.
DETAILS NOT 'COMPLETELY DISCLOSED'
As part of the deal, Manila will open its market to Washington. Trump said on his social media platform Truth Social that the Philippines will have no tariffs on American goods, but Marcos later said the zero tariffs will only be on certain products.
When asked about this, Romualdez said Manila has identified several areas that cannot have zero tariff or a free flow. But he added that details of the deal have not been 'completely disclosed'.
'We are still going to be able to go over it and still go, one by one, on the deals or on the tariffs that will be given to the United States, if there's any, on certain items - like I said, mostly agricultural products.
'But as mentioned by President Marcos, automobiles are definitely one item that has already been agreed upon. We will be importing American cars to the Philippines without any tariff,' he added.
The ambassador noted that Japan had earlier this week negotiated their tariff rate down from 25 per cent to 15 per cent. He pointed out that this means there is still room for negotiations.
As for how this could affect his country's economic growth, Romualdez said exports to the US only account for 16 per cent of the Philippines' total exports.
'Some of our leaders in our country have already said - like other countries are doing right now - they're looking for other markets where they can export their products, which is what we are doing already right now,' Romualdez added.
The US had a deficit of nearly US$5 billion with the Philippines last year on bilateral goods trade of US$23.5 billion.
SECURITY COOPERATION
Romualdez also noted that Trump has 'made it clear' he tried to peg the tariff rates to the Philippines' defence relations with the US.
Trump had said the two Pacific allies, which will celebrate 80 years of diplomatic relations next year, would also work together militarily but gave no details.
Romualdez told CNA's Asia First: 'Obviously, the special relations that we have with the United States on our defence alliance is an important part of this whole equation.
'However, like I said, it is still not a completely done deal as pointed out, because we still have time to be able to look into possibilities of bringing it lower.'
In terms of how Manila's security cooperation with Washington influenced the economic terms of the deal, as well as the meeting between Trump and Marcos, Romualdez noted that both countries have inked several security agreements with commercial components.
'The US Congress had just approved that an ammunition manufacturing facility will be established in the Philippines. That … will create jobs,' he said.
'This is the kind of agreement that we're looking at, that will combine both defence and economic (aspects). But we made it very clear that whatever it is, economic prosperity for the Philippines means economic security, and it will also mean more resources for us to be able to bump up or modernise our armed forces.'
With the Philippines facing intense pressure from China in the contested South China Sea, Marcos has pivoted closer to the US, expanding its access to Philippine military bases.
Both nations have a seven-decade-old mutual defence treaty and hold dozens of annual exercises.
Romualdez also said the Philippines will continue to reach out to other countries, including China.
MIGRATION CRACKDOWN
As for the issue of immigration, Romualdez said its current figures show about 3,700 Filipinos were being processed for deportation.
Reports have emerged of Filipinos without valid visas being detained by US Immigration and Customs Enforcement officers, amid Trump's push to clamp down on illegal migration.
According to data from the US Department of Homeland Security, there were around 350,000 undocumented immigrants from the Philippines in the US as at 2022 - the fifth-highest number after Mexico, Guatemala, El Salvador and Honduras.
Romualdez said he has met with the Assistant Secretary of the Department of Homeland Security.
'We have agreed that any Filipino, no matter what their status – meaning to say, if they have any criminal record or whatsoever – (if) they're up for deportation, we, the Philippines, will take them to our country, rather than to a third country,' he added.