US and Philippines Reach New Trade Deal with 19% Tariff Rate

WASHINGTON — President Donald Trump of the United States announced on Tuesday (July 22) a new 19 per cent tariff rate for goods from the Philippines following a visit by Philippine President Ferdinand Marcos Jr. to the White House, which Trump described as "beautiful." Trump also stated that US goods would be subject to zero tariffs.

The newly imposed tariff rate falls just below the 20 per cent that Trump had previously threatened earlier in the month. This rate surpasses the 17 per cent set in April when Trump introduced reciprocal tariff rates for numerous countries. The 19 per cent rate matches that of Indonesia and is slightly lower than Vietnam's rate of 20 per cent.

Following a meeting with Marcos in the Oval Office, Trump shared the news on his Truth Social media platform. During the meeting, a trade deal was reached, with Trump mentioning that the Philippines would open its market to the United States with zero tariffs and would pay a 19 per cent tariff rate.

Trump praised Marcos as a "very good and tough negotiator" and mentioned plans for the two nations, who will soon mark 80 years of diplomatic relations, to collaborate militarily, without providing specific details.

Marcos, the first Southeast Asian leader to meet with Trump during his second term, expressed that the United States is his country's "strongest, closest, most reliable ally." However, Marcos did not comment on Trump's announcement of the new tariff rate.

Jose Manuel Romualdez, the Philippine Ambassador to the United States, viewed the trade deal as "a mutually beneficial agreement that could be further enhanced in the future."

Trump emphasized that the trade agreement involves "very big numbers" that are expected to increase. Last year, the US had a trade deficit of nearly US$5 billion (S$6.39 billion) with the Philippines, with bilateral goods trade amounting to US$23.5 billion.

Trump has disrupted global trade patterns by imposing tariffs on nearly all trading partners, with most countries facing a 10 per cent tariff implemented in April and additional steep tariffs since August 1.

Gregory Poling, a Southeast Asia expert at Washington's Center for Strategic and International Studies, mentioned that it was premature to assess the impact of the trade deal with the Philippines due to the absence of specific details, similar to agreements with Indonesia and Vietnam.

"Ultimately, the final number may not be a major concern for the Philippine government as long as it keeps locally made products competitive with those of neighboring countries, which this deal accomplishes," Poling commented.

The White House also revealed further information about a framework for a trade agreement between the US and Indonesia, stating that negotiators were working towards finalizing the terms in the upcoming weeks.

During the Oval Office meeting, Trump hinted at a potential significant visit to China in the near future and highlighted the Philippines' shift away from Beijing following his election in November.

"The country may have leaned towards China, but we swiftly reoriented it," Trump remarked.

Officials from the Philippines indicated that Marcos intended to emphasize the need for Manila to enhance its economic strength to become a robust partner for the US in the Indo-Pacific region.

Protesters gathered near the White House upon Marcos's arrival, urging the Philippine leader to address the requests of Filipino Americans and migrant workers seeking support amidst federal immigration enforcement actions.

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