July 23, 2025
WASHINGTON – The Philippines got the short end of the stick in trade negotiations with the United States after the tariff on America-bound products was lowered to only 19 percent from 20 percent, while Manila is set to offer zero tariffs on US products entering the country.
The new rate is still higher than the initial 17 percent announced in April.
In a briefing with reporters at the Blair House on Tuesday, President Marcos explained that while a 1-percentage point reduction “might seem like a very small concession,” it was still a “significant achievement.”
READ: Philippines open to zero tariffs on some US products
In turn, however, the Philippines offered an open market to the United States and zero tariffs on certain goods, US President Donald Trump said on Truth Social.
READ: Philippine exports to America face 20% Trump tariff
Marcos confirmed that Manila opened the automobiles market, meaning it would no longer charge tariffs on US imports in this sector.
He added that there would be increased importations of soy, wheat and pharmaceutical products from the United States, the latter of which would result in cheaper medicine. Marcos did not clarify, however, if these sectors will also get zero tariffs.
Asked whether he thinks this is a loss on the part of the Philippines, Marcos said, “Well, that’s how negotiations go.”
“When we arrived in Washington, tariff rates were 20 percent. So why they came up from 17 percent to 20 percent is an internal matter with the United States government,” the President added. “We tried very hard to see what we can do and we managed a 1 [percentage point] decrease in tariff rates.”
Washington accounted for 16.6 percent of Manila’s exports in 2024, totaling $73.27 billion in export sales, data from the Philippine Statistics Authority show.
This makes America its largest export destination, followed by Japan (14.1 percent), Hong Kong (13.2 percent) and China (12.9 percent).
In imposing reciprocal tariffs on more than 100 countries, Trump insisted that it was meant to address trade imbalances and market barriers.
The Philippines currently exports more to the United States than it imports, thus registering a trade surplus of $4.9 billion last year. /cb