The global trade war is no longer just a story about the U.S. and China. Today, it’s reshaping economies across Asia, and the Philippines is feeling the shockwaves. Trump tariffs are threatening to disrupt Philippine exports, risking jobs and raising costs for businesses already struggling to stay competitive.
The Trade War: How We Got Here
When Trump first launched his aggressive tariff policies in 2018, most saw it as a fight between two economic giants: the U.S. and China. But in early 2025, after returning to power, Trump doubled down.
In February 2025, he introduced sweeping new tariffs, including a universal 10% duty on most imports and even higher rates for certain countries. China was hit the hardest, with tariffs peaking at an astonishing 145% before being negotiated down to 30% in May.
These measures were more than just economic punishment — they were a reaction to years of what the U.S. described as “unfair practices” by China. American firms have long complained about high entry barriers in China, forced technology transfer requirements, and the widespread dumping of cheap products that undercut local industries. China’s currency manipulation was another major grievance, keeping its exports artificially cheap while making imports more expensive.
Trump’s supporters argue that these tariffs are a necessary correction after decades of ineffective diplomacy and weak WTO enforcement. Rather than waiting for endless trade talks, they believed strong action was the only way to push China to change.
The Philippine Angle
While the Trump tariffs target China directly, their ripple effects are hitting many smaller trading nations — including the Philippines. The Philippine Food Exporters Association (Philfoodex) recently raised alarm bells, warning that snacks, fruit juices, and processed food products could all be affected. Even if Philippine goods aren’t directly taxed at the same high rates as Chinese products, they often rely on packaging and raw materials sourced from China. When these become more expensive or restricted, our final exports lose their edge in price-sensitive markets like the U.S.
The situation became even more tense this July, when the U.S. announced it would raise tariffs on certain Philippine exports to 20% starting August 1. According to officials, this decision was partly due to the Philippines’ growing trade surplus with the U.S., which reached $4.9 billion last year.
In 2024 alone, trade between the U.S. and the Philippines hit $23.5 billion, with the U.S. importing $14.2 billion worth of Philippine goods, from electronics and garments to food products. While our country has enjoyed duty-free benefits under programs like the U.S. Generalized System of Preferences (GSP), these new tariffs could undo years of progress and threaten thousands of local jobs.
The Government’s Response to Trump Tariffs
The Philippine government hasn’t taken these new tariffs sitting down. Officials have been working overtime to protect exporters and keep local industries competitive despite these rising challenges.
President Ferdinand Marcos Jr. and Trade Secretary Alfredo Pascual started talks with the U.S. as early as May this year, sending a team to Washington to make the country’s case. More discussions are set to happen before August 1, when the higher tariffs officially kick in. Their main goal? To secure either lower rates or at least some exemptions for key Philippine products.
At the same time, Manila is doubling down on incentives to help local businesses stay strong. Thanks to the CREATE Act, small and medium enterprises (SMEs) now enjoy lower corporate tax rates — as low as 20% — while bigger companies pay around 25%. On top of that, firms operating under the Philippine Economic Zone Authority (PEZA) can benefit from tax holidays that last up to seven years, VAT exemptions, and duty-free imports on essential equipment and materials.
But it doesn’t stop at tax breaks. The Philippine Trade Training Center (PTTC), run by the Department of Trade and Industry, offers practical workshops and programs to help businesses improve product quality, strengthen supply chains, and adapt to digital markets. From export management courses to hands-on sessions about meeting international standards, these programs are designed to make local exporters more resilient and competitive abroad.
