PHL exports not seen competitive at 17% US tariff rate after Vietnam deal

EXPORTS from the Philippines will have difficulty competing if the US restores its 17% reciprocal tariff rate, particularly after Vietnam was granted a favorable trade deal last week, the Foreign Buyers Association of the Philippines (FOBAP) said.

- By Justine Irish D. Tabile Reporter

FOBAP President Robert M. Young said Vietnam struck a deal with the US that lowered its tariff to 20% from the 46% originally announced in early April.

“Presuming we have the 17% tariff ... the latest Vietnam-US deal will definitely hinder our chances of competing in a price war,” Mr. Young said via Viber.

“To start with, even prior to Trump’s reciprocal tariff, Vietnam had a 10-15% lower free on board selling price compared to the Philippines,” he added.

He said Vietnam’s pricing advantage is due to its 50% lower wages and modern infrastructure.

“Realistically, there’s no contest between us. However, as FOBAP has been advocating, we, with the government, must seriously exert all efforts to improve in order to remain on the radar of the foreign buyers,” he added.

However, he said if the Philippines retains its current 10% tariff, “it may give some elbow room, but it will still not be easy to beat Vietnam prices.”