DTI: Over 60% of PH exports exempt from 12.5% US tariff
Despite the new 12.5-percent tariff imposed by the United States, the Philippines remains in a stronger position than many of its regional competitors, with more than 60 percent of its exports exempt from the additional levy.
Trade Undersecretary Ceferino Rodolfo said the tariff, imposed by Washington on countries which it deems to lack safeguards against the importation of goods made through forced labor, would be “not at all” disruptive for Philippine exporters.
Only 34.28 percent of Philippine exports to the United States—or $6.25 billion worth of goods—will be subject to the new tariff, according to the Department of Trade and Industry (DTI).
The remaining $11.98 billion will remain exempt.
“We’re not in a bad situation. Not at all,” Rodolfo said. “But we want the best for our exporters.”
Bianca Sykimte, director of the DTI’s Export Marketing Bureau, said the Philippines’ top exports to the United States—semiconductors and electronics as well as agricultural products—will continue to enter the US duty-free.
Automotive parts, minerals and aircraft parts are likewise spared from the new tariff.
Products that will be covered by the new levy are those produced by “labor-intensive” industries, such as leather and travel goods, apparel, footwear and toys.
The Philippines also compares favorably with its regional peers.
Based on the DTI’s assessment, Sykimte said about 83 percent of Indonesia’s exports to the US and roughly 40 percent of Malaysia’s shipments are exposed to the additional tariff.
Rodolfo added that the Philippines’ 12.5-percent tariff appears to be its “ceiling” under the US Section 301 investigation.
‘Best deal possible’
Unlike several neighboring economies, the Philippines was not included in the United States Trade Representative’s (USTR) separate investigation into structural excess capacity. This covers China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, South Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan and India.
Even so, Rodolfo said the government continues to engage the USTR to secure the “best deal possible” for Philippine exporters.
He added that the DTI has also secured offers from multilateral institutions and bilateral partners to support the implementation of the joint administrative order banning the importation of goods produced through forced labor.
That order, issued a day before Washington announced the new tariff, created an interagency committee led by the DTI, together with the Department of Labor and Employment and Department of Finance, to establish a mechanism for investigating forced labor cases. Support from development partners will come in the form of grants and technical assistance.
“They see that, at a principles level, this is something very good—that the Philippines is promoting decent work, even if the supposed forced labor happens outside the country,” Rodolfo said.
Rodolfo added that the USTR is already reviewing the order and has assured the Philippine government that its assessment is ongoing, meaning changes to the 12.5-percent tariff could be made “at any time.”
