IN a post on the social media platform Truth Social, United States President Donald Trump issued a glowing comment on the visit of Philippine President Ferdinand Marcos Jr. to Washington. But what did the country really get?
The tariff on Philippine exports to the US was lowered to 19 percent from 20 percent. However, this was higher than the initial “reciprocal” rate of 17 percent announced in April.
In comparison, tariffs on our Asian neighbors’ exports to the US have been reduced significantly. Vietnam, initially imposed a 46-percent tariff, saw this cut to 20 percent; Indonesia, 19 percent from 42 percent; and Japan, 15 percent from 34 percent.
In exchange for our 1 percentage point reduction, we are allowing the entry of US exports to the Philippines at zero tariff. It was later clarified by Marcos that this would only apply to pharmaceutical products, automobiles, soybean and wheat.
Philippine Ambassador to the US Jose Manuel Romualdez further clarified that details of the tariffs on US exports to the Philippines were still subject to negotiations. He recognized that if a zero tariff was applied to agriculture, US farm goods exports would wreak havoc on Philippine agriculture. He also said that there was a need to protect our farmers.
As expected, Washington promised “enhanced military cooperation” with the Philippines. Whether this one is an economic blessing is doubtful. Undeniably, it further puts the country in the forefront of the competition for regional supremacy between the US and China.
While countries like Vietnam, Indonesia and Malaysia are also at loggerheads with China over ownership of disputed islets and reefs, they have maintained good working and economic relationships. As a result, these countries have become the recipients of major Chinese investments and have become favorite destinations of Chinese tourists.
In contrast, we have not seen any major US investments in the country despite being its closest military ally in the region. It is being bandied that an ammunition factory will be established by the US capable of generating jobs. On the downside, it will definitely serve as a magnet for a Chinese attack should war break out between the two superpowers.
If open conflict happens, God forbid, the Philippines will be annihilated, what with the sophisticated missiles and drones in the hands of China. We will be like Ukraine, which has been used as fodder in the competition for supremacy between Russia and the West. While Ukraine is being pulverized by Russian bombs, the West is still busy debating on the next steps it will take while its citizens remain safe.
Sadly, there are issues which are most important to ordinary Filipinos that were ignored during Marcos’ visit. First is the status of Filipino migrants and workers, and the manner by which they should be treated by US authorities. Will there be some leniency accorded to Filipinos as we are the closest ally of the US in Southeast Asia?
What about the tax on remittances sent by Filipino migrant workers to relatives in the Philippines? Their earnings come from hard work, blood and sweat, and are intended to improve the living conditions of relatives back home. Will they be given a reprieve from the tax as a gesture of goodwill and humane treatment, again with the country being the most reliable ally of the US in this region?
UN Comtrade data show that trade between the US and the Philippines amounted to $23.5 billion in 2024. US exports to the Philippines totaled $9.3 billion, up 0.4 percent ($38.8 million) from 2023. On the other hand, Philippine exports to the US totaled $14.2 billion, up 6.9 percent ($912 million). Thus, the US trade deficit with the Philippines was $4.9 billion in 2024, a 21.8-percent increase ($873.3 million) over 2023.
In comparison, US trade deficits in 2024 to other Asian countries are as follows: Vietnam, $123.5 billion; Indonesia, $17.5 billion; and Japan, $68 billion. Given that the US had the lowest trade deficit vis-à-vis the Philippines and Trump’s argument that his tariffs are meant to correct the huge US trade imbalance with the rest of the world, why is the tariff imposed on us equivalent to Indonesia’s, just a bit lower than Vietnam’s and higher than Japan’s?
In addition, Vietnam and Indonesia are being used by Chinese manufacturers as transshipment hubs for Chinese goods in order to avoid paying higher tariffs imposed on China by the US. More bewildering is the fact that both Vietnam and Indonesia are members of Brics, an alliance of countries that wants to lessen financial dependence on the dollar.
In the meantime, the Philippines plays host to military bases where thousands of US troops operate and where sophisticated warplanes and US missiles all aimed at China are on standby and supported by fuel and ammunition depots.
Unfortunately, despite this practically mendicant stance, the Philippines has been treated the same as its Asian neighbors.
The tariff deal is reminiscent of the Laurel-Langley Trade Agreement that was forged between the US and the Philippines in 1954. In that pact, “reciprocal parity rights” were bestowed on citizens and corporations of both countries, giving them equal rights to exploit natural resources and operate public utilities in the US and the Philippines. As the Philippines was just emerging from the ravages of World War II and had practically no capital to invest in the US, the agreement expectedly turned out to be a lopsided one in favor of the Americans.
We are seeing the same kind of arrangement now. With friends like the US under Trump, who needs enemies?
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