Advertise your business here! 🚀

Peza: Us Tariff On Ph-Made Goods Brings Opportunities, Challenges

port-and-ship

Apr 04, 2025

Port Calls

The US tariff on Philippine-made goods brings both opportunities and challenges for the Philippines, according to the Philippine Economic Zone Authority (PEZA).

It is a “welcome opportunity for the country to broaden its trade and investments with the US” at the same time a challenge for companies operating in economic zones, the agency said in a statement.

The US is the Philippines’ top export destination. Locators from the electronics manufacturing services and semiconductor manufacturing services (EMS-SMS) and IT-business process management (BPM) industries account for the biggest share in export sales to the US at 44.5% and 28.5%, respectively.

US President Donald Trump’s announcement on April 2 (US time) to impose a 10% tariff on majority of goods imported to the US, effective April 5, has intensified a global trade war that threatens to stoke inflation and stall growth.

Philippine exports to the US, on the other hand, will be slapped with a 17% tariff starting April 9.

READ: Trump announces 10% across-the-board tariffs

While the 17% tariff will make Philippine exports to the US more expensive, PEZA noted the rate remains among the lowest in Southeast Asia. Neighboring countries such as Vietnam (46%), Thailand (36%), Indonesia (32%), and Malaysia (24%) face significantly higher tariffs.

The comparatively lower rate highlights the strong economic ties between the Philippines and the US and positions the country more favorably than its regional counterparts, PEZA said.

The agency sees this as an opportunity to attract greater investment—particularly from companies based in countries imposed higher tariffs by the US—seeking to reduce export costs by relocating operations to the Philippines.

“We view with guarded optimism that the recent US imposition of reciprocal tariffs will provide strategic opportunities for the Philippines to improve its economic relationship with the US,” said Trade and Industry Secretary and PEZA Board chairman Cristina Aldeguer-Roque.

By leveraging the Philippines’ strategic advantages and fostering a conducive business environment, PEZA said it aims to navigate the challenges posed by the new tariffs and sustain economic growth.

This strategy aligns with the earlier pronouncement of Special Assistant to the President for Investment and Economic Affairs Secretary Frederick Go that Trump’s imposition of a 17% tariff on Philippine goods entering the US is a boon rather than a bane for the country’s economic future, PEZA said.

Recognizing the evolving global trade environment, PEZA said it is proactively promoting the Philippines under the “China+1+1” strategy, which encourages businesses to maintain operations in China while diversifying their supply chains by expanding into the Philippines.

Coupled with recent positive developments, including the Philippines’ participation in the Regional Comprehensive Economic Partnership, intra-ASEAN trade, the impending renewal of the European Union Generalized Scheme of Preferences, and the enactment of the CREATE MORE Act, PEZA believes these measures will mitigate the tariff impact and make the Philippines an even more attractive investment destination.

Given the strategic importance of the Philippines’ IT-BPM and EMS-SMS sectors, which account for the biggest exports to the US and are the major generators of quality jobs in the country, the government may lobby for reduced tariff for exports of electronics-semiconductor products and IT-BPM services, according to PEZA.

The US may consider this proposal since a large number of local EMS-SMS and IT-BPM investors are American companies that provide critical support to their principals and major clients in the US. As a sign of goodwill, the government may also offer to reduce the current duties on essential goods/services imported from the US in the spirit of reciprocal tariffs.

Share Your Insights!

Publish your articles, reach a global audience, and make an impact.

Related News You might want to check out

Hellenic Shipping News

Oh, Was Payrolls This Morning? A Jobs Report Deep Divein World Economy News 07/04/2025 Markets were perhaps the least interested they’ve ever been in a monthly employment report on Friday, with world stock markets plunging in the wake of President Trump’s massive tariff announcement on Wednesday and China’s hardball retaliation. The U.S. economy added 228,000 jobs in March (USNFAR=ECI), 94.9% improvement over February’s downwardly revised 117,000 gain and 93,000 more than analysts expected. This marks the fifth upside surprise in the past 12 months, and the fourth reading north of 200,000 over the past year. Digging beneath the headline, service-providing jobs accounted for 94.3% of the 209,000 private sector job adds. The retail sector rebounded, adding 23,700 jobs, while government payrolls – which include state and local agencies unaffected by the mass DOGE-related firings – increased by 19,000, a steep acceleration from February’s gain of 1,000, revised sharply lower. “While the data is now especially stale in light of this week’s sweeping tariff actions, the strong beat on U.S. jobs should help investor sentiment heading into the weekend,” writes Natalia Lojevsky, managing director at CIFC Asset Management. “The number confirms that the US economy, lead by the seemingly indefatigable US consumer, has kept trucking along despite pervasive uncertainty which has roiled risk assets,” Lojevsky adds. The report also gave markets their first glimpse at March inflation, showing average hourly wages rose by 0.3%, slightly warmer than the prior month’s 0.2% print and inline with analyst expectations. Year-over-year, however, wage growth cooled down, rising to 3.8% from 4.0%, and landing a hair below the 3.9% consensus. It’s a move in the right direction, but 3.8% remains well north of the Powell & Co’s 2% annual inflation goal. “The Fed’s job got a lot more complex as inflation is not yet under control,” writes Jeffrey Roach, chief economist at LPL Financial. The jobless rate (USUNR=ECI) unexpectedly rose to 4.2% – analysts expected it to stand pat at 4.1% – while at the same time the labor market participation rate improved by just a smidgeon, rising 10 basis points to 62.5%, bouncing off a two-year low. When more Americans leave the sidelines and dive into the labor pool, that tends to put upward pressure on the unemployment rate; it’s not until someone starts looking for a job that they’re counted among the jobless. “The headline unemployment rate moved higher … but for ‘good reasons’: the labor force participation rate rose,” says Chris Zaccarelli, chief investment officer at Northlight Asset Management. Average unemployment duration jumped last month to 23.6 weeks, from an even 21.0, the second-longest this metric has been since April 2022. This corresponds well with souring labor market confidence and the general downward hiring trend as expressed by the Labor Department’s JOLTS data: Finally, breaking down joblessness by race and ethnicity, unemployment among White Americans eased to 3.7% from 3.8%, while Black joblessness worsened, rising to 6.2% from 6.0%. That pushed the White/Black unemployment gap 0.3 percentage points wider to 2.5 ppts. Source: Reuters