Global markets have just endured one of their most dramatic weeks in recent years — triggered by President Donald Trump’s aggressive new tariffs plan. Stock markets fell hard after his announcement, only to rebound sharply days later after a tariff pause gave investors hope for negotiations.
For the Philippines, this tariff pause offers crucial time to prepare — but the risks are far from over.
A Turbulent Week: How the Markets Reacted
Everything kicked off on April 2, 2025, when President Trump dropped his biggest trade bombshell yet. He announced new tariffs across the board — a 10% tax on all U.S. imports, plus much steeper rates for certain countries. China would face a punishing 34%, while the European Union, Japan, Vietnam, and the Philippines were also hit — with the Philippines looking at a 15% tariff. The rollout was set in stages: the general tariffs would start on April 5, while the higher country-specific rates would kick in by April 9.
Markets didn’t take the news well. Investors didn’t wait for the tariffs to take effect — they sold off fast. By April 3 and April 4, Wall Street was in retreat. The S&P 500 lost over 15% from its January high, and the Nasdaq crashed more than 20%. In Asia, things weren’t much better. The Philippine Stock Exchange Index (PSEi) dropped alongside global markets, with traders worried about slowing trade and supply chain disruptions.
Oil prices shot up too. Brent crude broke through the $90 per barrel mark — bad news for energy-importing countries like the Philippines. The peso also slipped early in the week, dipping toward 56.30 against the dollar before finding some stability.
Meanwhile, gold — the classic safe-haven asset — saw a surge in demand, as nervous investors looked for protection amid the chaos.
Tariff Pause Sparks Market Rebound
On April 9, Trump surprised markets again — this time by announcing a 90-day tariff pause for certain U.S. allies, including the Philippines. The pause was meant to allow room for trade negotiations and prevent immediate damage to friendly economies.
The announcement triggered a massive relief rally. The S&P 500 surged nearly 8% in its biggest one-day gain since 2008. Big tech stocks like Apple, Nvidia, and Tesla added hundreds of billions in market value. The PSEi recovered much of its losses, tracking the global rebound.
Oil prices stabilized, while the peso firmed as investor confidence returned.
China Hit Harder: Tariffs Raised to 125%
However, while U.S. allies were given time to negotiate, Trump wasted no time escalating his trade war with China. On the same day as the tariff pause announcement, Trump hiked tariffs on Chinese imports from an already elevated 104% to 125% — effective immediately.
This aggressive move puts the Philippines in a vulnerable position. Many Philippine exporters — especially in electronics — are linked to Chinese supply chains. If China’s economy slows further or global trade flows weaken, the Philippines could feel the indirect effects.
The Impact of the Tariff Pause on the Philippines
The tariff pause gives the Philippine government valuable time to act. Officials are already preparing for talks with U.S. trade representatives to push for exemptions or protective measures for key industries like electronics, garments, and agriculture.
Exports to the U.S. were worth over $23 billion in 2024 — a vital source of jobs and income for millions of Filipinos.
Without this pause, the sudden hit of tariffs could have disrupted trade flows and threatened thousands of Filipino jobs.
Moreover, higher oil prices remain a concern. The Philippines imports most of its fuel — so any further escalation in global trade tensions could push energy costs higher and add to inflation pressures.
The tariff pause is a welcome relief for the Philippines — but only temporary. Trump’s tariffs on China show that the trade war is still heating up, and the Philippines must remain vigilant.
