PH hit seen from reciprocal tariffs

RECIPROCAL tariffs that US President Donald Trump said he would announce this week could disrupt Philippine exports, analysts warned on Tuesday.

The move will be particularly damaging for the country, Moody’s Analytics economist Sarah Tan told The Manila Times, “because duties levied on US imports are higher than the tariffs on Philippine imports imposed by [the] US.”

If the United States aligns its tariffs accordingly, she added, the cost of Philippine exports to the US will rise, making these less attractive to American buyers.

“More broadly, President Trump’s state commitment to respond to any retaliatory tariffs creates uncertainty in the global economy,” Tan also noted.

She said that this would dampen capital investments and slow mergers and acquisitions as businesses adopt a wait-and-see attitude.

Trump, who kicked off a trade war this month by announcing tariffs on goods from Canada, Mexico and China, on Monday fired another salvo by raising tariffs on steel and aluminum imports.

He also reiterated plans to impose reciprocal tariffs on other countries within two days, and said that he was looking at raising duties on cars, pharmaceuticals and semiconductor chips.

The Philippines is the world’s ninth-largest chip exporter according to the Organization of Economic Cooperation and Development, with the semiconductor sector the country’s largest export industry.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the reciprocal tariffs would hit key exports, including electronic products that account for over half of total merchandise shipments to the US.

Also likely to be affected are shipments of ignition wiring sets, other manufactured goods, coconut oil, machinery and transport equipment.

“[Reciprocal tariffs] could slow down international trade between the US and the Philippines … [and] would make Philippine exports to the US more expensive,” Ricafort said.

Beyond bilateral trade, he noted that a broader slowdown in global trade was possible, indirectly affecting Philippine exports, particularly those that serve as inputs in global supply chains linked to US markets.

The US was the biggest buyer of Philippine-made goods as of December last year, having purchased $947.77 million or 16.8 percent of total exports.

Electronics remained the country’s top export, accounting for $2.80 billion or 49.6 percent of total exports during the month. Manufactured goods and coconut oil followed at $355.36 million and $283.56 million, respectively.