Following recent talks between the Presidents of the Philippines and the United States, the two countries reached a preliminary agreement to adjusts tariffs on traded goods.
Under the terms, Philippine exports to the US will be subject to a 19% reciprocal tariff, slightly lower than the previous 20%. In return, selected US products — including automobiles — will enjoy 0% tariffs when imported into the Philippines. The agreement also includes a commitment from the Philippines to increase imports of soy, wheat and pharmaceuticals products from the US.
The deal is not yet final, with further details expected to be announced soon.
Understanding reciprocal tariffs
Reciprocal tariffs, while not new in concept, were more actively applied and formalized under the Trump administration as part of efforts to address perceived trade imbalances. The US uses this approach to align its tariff rates with those faced by US goods in other markets.
What it means for Philippine businesses
- Philippine exports to the US will feel the impact. The 19% tariff will be added on top of existing customs duties, potentially reducing the competitiveness of local goods and leading to lower export sales.
- Local producers face new risks. The Philippines’ agreement to remove tariffs on certain US goods could increase competition at home. Lower-priced imports may affect local brands, reduce market share and squeeze revenue for domestic producers.
PwC Philippines is closely monitoring how this develops and will continue to share timely updates.
For questions, please contact:
Luningning M. Pizarra
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