Tariff Trade Rise A Blow To Marcos
Trade between the US and the Philippines just got trickier. The key US ally has seen its average tariff rate on exports to the United States rise from 17% in April 2025 to 19% by August. This sharp increase comes despite the country positioning itself as a key regional ally of Washington. For a nation that has strategically aligned itself with the US across security, defence, and foreign policy, the lack of economic reward is striking.
Only one other ASEAN country, Malaysia, faced a similar tariff hike during the same period. However, Malaysia has managed to maintain a more diversified approach to its international economic relations. The Philippines, in contrast, has grown increasingly dependent on the United States as its primary partner. This reliance, paired with deteriorating ties with China, leaves the country dangerously exposed to shifts in American domestic policy.
The higher tariffs have already begun impacting Philippine exporters, particularly in electronics, garments, and agricultural goods. Many businesses that had expected expanded access or preferential treatment are now struggling with reduced competitiveness and higher costs. The assumption that close diplomatic ties would automatically translate into favourable trade outcomes has been proven false.
A Cabinet That Misjudged Trade Realities
The current administration has severely miscalculated the realities of global trade. While the government has focused heavily on security cooperation and diplomatic visibility with the United States, it has failed to prioritise comprehensive trade negotiations. The Department of Trade and Industry has issued generic reassurances about seeking better access to American markets, but no meaningful agreements have materialised.
Unlike Vietnam and Thailand, which have signed robust trade deals and solidified their positions in global supply chains, the Philippines has remained passive. The absence of a bilateral free trade agreement with the US puts Filipino exporters at a structural disadvantage. The government underestimated the shift in US economic policy towards domestic reindustrialisation and protectionism, believing loyalty alone would ensure preferential treatment.
Instead of proactive trade diplomacy, the focus has been on symbolic alignment. More US military presence, louder statements on the South China Sea, and closer political coordination have not delivered what businesses need. Trade policy was treated as an afterthought.
This is a costly mistake. Other nations have combined strategic alignment with economic assertiveness. The Philippines did not. The result is clear: rising tariffs, economic vulnerability, and loss of competitiveness.
Ignoring Past Lessons and Regional Trends
Former President Duterte, for all his controversies, took a broader approach to trade and foreign policy. He actively pursued diversification by engaging China, Russia, and other ASEAN economies. His administration reduced reliance on any single power, recognising that national interest required balance.
The current leadership reversed that course. By antagonising China and fully embracing Washington, the Philippines hoped to gain both political favour and economic access. But history has shown that the US has often failed to deliver tangible economic benefits to its smaller partners. Once again, the Philippines finds itself being treated more as a pawn than a partner.
This is not the first time the US has imposed trade measures on Manila while praising the alliance in public. The failure to anticipate this recurring behaviour and prepare accordingly reflects the weakness of the country’s current trade strategy.
The tariff hike from 17% to 19% may appear small, but it reflects a bigger problem. It sends a message that the Philippines is not seen as economically critical by Washington. This should prompt serious reflection and urgency within the cabinet.
Who will answer?
For the Philippines to recover from this setback, trade policy must be given the highest priority. Cosmetic diplomacy and summit photographs will not compensate for economic losses. The government must launch serious negotiations with the United States for a bilateral trade agreement. It must also re-engage with China and ASEAN economies to rebuild strategic balance.
The country cannot afford to be trapped in a single-track economic relationship. The future depends on bold trade leadership, pragmatic diversification, and a willingness to challenge assumptions. Trade is not an automatic benefit of friendship. It is a product of negotiation, leverage, and national strategy.
Without a serious trade framework, more sectors will suffer, more exporters will lose ground, and more jobs will be at risk. The tariff increase is not an isolated event. It is a symptom of a deeper policy failure that must now be addressed with urgency, clarity, and courage.
