PHL loses tariff edge as US also sets 19% rate on 4 ASEAN members

THE PHILIPPINES may have lost its edge in the US market as the US imposed a similar 19% tariff on imports from Indonesia, Cambodia, Malaysia and Thailand, analysts said.

- By Aubrey Rose A. Inosante Reporter

Analysts warned this may undermine the Philippines' competitiveness as it erodes the margin of preference and limits opportunities for trade diversion.

In an executive order signed on July 31, US President Donald J. Trump imposed a 19% duty on many goods from five members of the Association of Southeast Asian Nations (ASEAN) — the Philippines, Cambodia, Malaysia, Thailand and Indonesia. This will take effect on Aug. 7.

“What we've been saying before is that a 20% or even 19% tariff is acceptable — as long as our competitors have higher rates than us,” Philippine Exporters Confederation, Inc. (Philexport) President Sergio Ortiz-Luis, Jr. said in a phone interview over the weekend.

“The problem now in Asia is that countries like Japan and South Korea have even lower tariffs, and now we've been matched by Indonesia, Thailand, and the rest of the ASEAN+5, who are also our direct competitors. That’s where the problem lies for us.”

The Philippines had received the smallest tariff discount among ASEAN members even though Philippine President Ferdinand R. Marcos, Jr. met with Mr. Trump at the White House.

The new rate is slightly lower than the 20% the US had threatened to impose, but higher than the 17% tariff announced in April.