A 20 percent tariff on Philippine-made goods will be charged before they are allowed to enter the US market.
This was the message US President Donald Trump told Philippine President Ferdinand Marcos Jr. in a letter sent last week.
The new tariff will take effect starting August 1 this year.
Trump also wrote similar letters dated July 9 to seven other countries in the region regarding his new “reciprocal tariff” rates.
The other letters were sent to Brunei, Moldova, Algeria, Iraq, Libya and Sri Lanka.
The US president had initially written similar letters to 14 other countries, which will also take effect on August 1.
Among the ASEAN countries, the Philippines was dunned the lowest reciprocal tariff of 20 percent. For the other countries, the rates varied from 24 percent to 48 percent.
In his letter to Marcos, Trump said the relationship between their two countries “has been, unfortunately, far from reciprocal.”
But Trump added that he has “agreed to continue working with the Philippines, despite having a significant trade deficit.”
In his letter which was posted over Truth Social, Trump said: “Please understand that these Tariffs are necessary to correct the many years of the Philippines Tariff, and Non-Tariff, Policies and Trade Barriers, causing these unsustainable Trade Deficits against the United States. This Deficit is a major threat to our Economy and, indeed, our National Security!”
The 20 percent is higher than the 17 percent rate earlier set that was supposed to take effect on April 9. Trump later suspended implementation of the reciprocal tariffs to July 9 to allow more time for negotiations with countries.
The White House earlier said the new reciprocal tariff rates were “designed to make the terms of our bilateral trade relationships more reciprocal over time and to address the national emergency caused by the massive US goods trade deficit.”
In his letter to Marcos, Trump further stated that the new 20 percent tariff rate on Philippine exports to the US is separate from all sectoral tariffs.
Trump said, “Please understand that the 20 percent number is far less than what is needed to eliminate the Trade Deficit disparity we have with your Country.”
He added that goods transshipped to “evade a higher Tariff will be subject to that higher Tariff.”
If the Philippines decides to raise its tariffs on the US, Trump said such rates will then be added onto the 20 percent that the US will be charging.
“If you wish to open your heretofore closed Trading Markets to the United States, and eliminate your Tariff, and Non-Tariff, Policies and Trade Barriers, we will, perhaps, consider an adjustment to this letter,” Trump said, adding that the tariff may be modified depending on the US’ relationship with the Philippines.
He also added that no tariff will be imposed “if the Philippines, or companies within your country, decide to build or manufacture products within the US and, in fact, we will do everything possible to get approvals quickly, professionally, and routinely – in other words, in a matter of weeks.”
Philippine ambassador to the US Jose Manuel Romualdez said the Philippines is still planning to “negotiate that (20 percent tariff) down.”
Marcos will be visiting the US later this month and will meet with Trump. Malacañang has not confirmed or denied if the new tariff rate will be discussed at their meeting.
