Insights on Tariff Rate Deal Benefits
MANILA, Philippines — The recent tariff rate deal between President Ferdinand Marcos Jr. and US President Donald Trump holds promising long-term benefits for the Philippines, according to seasoned economist and former Albay lawmaker Joey Salceda. The tariff rate deal is still being fine-tuned, and the initial announcements should be seen as preliminary and diplomatic gestures.
Salceda explained that President Marcos’ decision to not immediately correct Trump’s broad statements reflects diplomatic tact rather than uncertainty about the agreement’s value. “Trump often tailors his messages to resonate with his domestic audience. Knowing this helps in shaping beneficial agreements,” Salceda remarked.
Ongoing Negotiations Aim to Lower Tariffs
Concerns have surfaced about whether the Philippines truly gained from the deal, given the tariff for Philippine exports to the US was set at 19%, just 1% lower than the previous 20%. In return, the Philippines will open its market further to US goods, granting zero tariffs on selected products.
However, sources close to the talks reveal that further negotiations are planned to secure even lower tariff rates on Philippine goods. Salceda emphasized that zero tariffs on US imports might not be as broad as initially portrayed. “The US is particularly focused on zero tariffs for cars to remain competitive against manufacturers from Japan, China, and Vietnam,” he noted.
Strategic Gains Beyond Tariffs
Zero tariffs on US-made capital equipment could boost local manufacturing, especially in sectors like semiconductors. Access to advanced photolithography machines and wafer etching tools without tariffs could enhance the country’s technological edge. “These low-cost, high-return imports present mutual economic benefits,” Salceda added.
The deal also reaffirms the Philippines’ strategic security partnership with the US. While support for other allies like Ukraine and South Korea faces scrutiny, the Philippine-US defense cooperation agreement remains strong and may even expand. This strengthens the country’s geopolitical standing amid regional challenges.
Non-Tariff Benefits and Infrastructure Projects
Beyond tariffs, the agreement includes non-tariff advantages such as financing support for infrastructure projects. For instance, collaboration between the US Trade and Development Agency and the Philippine Department of Transportation aims to provide technical assistance for the Subic-Clark-Manila-Batangas Railway project. More such partnerships are expected to follow.
Criticism and National Industry Concerns
Despite positive outlooks, some progressive groups criticize the deal for favoring US interests. They argue it risks turning the Philippines into a dumping ground for American products due to zero tariffs on certain imports. Concerns have also been raised about the impact on local industries competing against cheaper US goods.
One local lawmaker expressed worries that the agreement could undermine Filipino producers and called for transparency on the deal’s full terms. Another group described the pact as heavily imbalanced, reflecting unequal relations between the two countries.
Leverage and Future Opportunities
Salceda remains optimistic, highlighting that the Philippines holds leverage in ongoing discussions. Issues such as non-tariff barriers on US agricultural products like beef, wheat, and corn remain on the table. “The US has not challenged our biosafety rules, which we are also updating,” he said.
Moreover, the US’s clear support for the Philippines’ stance in the West Philippine Sea strengthens future requests for defense modernization aid. “Trump was the first US leader to openly back our position, which is a significant diplomatic gain,” Salceda added.
Building Global Standing Through Trade
Another ally of President Marcos, Leyte 1st District Representative Ferdinand Martin Romualdez, praised the discussions for enhancing the Philippines’ role in international affairs. He noted that access to the US market is transformative, enabling Filipino businesses to compete on a global stage.
“Access to the US market is a game-changer. It opens doors for our farmers, fisherfolk, and local producers to grow and succeed internationally,” Romualdez said. He emphasized that nation-building is a gradual process, and securing a place at the negotiation table is a crucial step forward.
For more news and updates on tariff rate deal, visit Filipinokami.com.
