President Marcos Jr. made a landmark official visit to the US, July 21-23, 2025, as a guest of President Trump. The Filipino leader agreed to zero tariff on certain US exports to the Philippines, and 19% US tariff on PH exports. Not reciprocal, critics say. Marcos Jr. says the deal is significant. For many reasons, among them: 1) 19% is the second lowest rate for an ASEAN exporter; 2) It reaffirms the solid, ironclad strategic security partnership between the US and its first and only treaty ally in Asia, the Philippines; 3) It allows protection for PH products harmed by 67% of imports from the US, including rice, sugar, corn, coffee, and other PH agricultural products; 4) It enhances market access making the Philippines a more attractive manufacturing hub for exporters to the US; 5) It maintains the Philippines’ comparative advantage making it among the most competitive in ASEAN in trading with the US; and 6) It leads to greater US role in defense, manufacturing, finance and banking, infra buildup, and economic cooperation with the Philippines.
By TONY LOPEZ
It all boiled down to 1% — the discount or reduction in tariff rate imposed by United States on Philippine products exported to America.
Effective Aug. 1, 2025, the US will slap a 19% tax or tariff on Philippine exports to the US. Thanks to US President Donald Trump, the tariff should have been 20%.
Don Donald reduced the tariff to 19% after President Ferdinand “Bongbong” Romualdez Marcos Jr. (BBM) paid the American leader a visit upon the latter’s invitation, on July 22, 2025 (around midnight in Manila, on July 23, 2025). BBM was a house guest at the Blair House for three days.
In 2024, the Philippines exported to the US $14.2 billion worth of goods. One percent of that is $142 million. If the 20% original tariff intent was applied, Manila would have paid $2.84 billion in tariff or taxes to the US government. With the reduced rate of 19%, Manila will now pay only $2.698 billion. Now, $2.84 billion less $2.698 billion is $142 million.
Between friends and allies of longstanding (for over a century now, according to BBM, reckoning it from 1898, when the Americans defeated the Spaniards at the Battle of Manila Bay, which was a joke), what is $142 million? It’s pennies.
Pennies. Especially if viewed from the fact that Trump got zero tariff on products US exports to the Philippines. In 2024, the US shipped $9.3 billion worth of goods to the Philippines. Presumably, most of those will pay no tax or tariff to enter the Philippine market. If tariffs were reciprocal, the Americans should be paying $1.767 billion (19%) on their exports to the Philippines. With zero tariff, the $1.767 billion is the amount the Americans saved.
Tariffs one aspect
Tariffs, however, are just one aspect of the relations between the Philippines and the US.
Firstly, not all Philippine products will be subject to the 19% US tariff. As of 2022, the Philippines had enjoyed a Most-Favored-Nation (MFN) tariff of 6.1% on its exports to the US. The Philippines’ MFN tariff was 9.8% for agricultural products and 5.5% for non-agricultural products imported from the US. “Zero tariffs for the US are not as sweeping as Trump makes it appear,” says Joey Salceda.
“US agricultural exports are significantly inhibited by the high in-quota tariffs for agricultural products under the Philippines’ tariff-rate quota (TRQ) program, known as the Minimum Access Volume (MAV) system. Under the MAV system, the Philippines has scheduled TRQs on select agricultural products, including sugar, corn, coffee and coffee extracts, potatoes, pork, and poultry products, with in-quota tariffs ranging from 30% to 50%,” says a 2024 report of the Office of the US Trade Representative.
Thus, despite Trump’s tariff war, the Philippines will continue to protect its rice, corn, sugar and other agricultural and sensitive products from cheaper import competition.
Secondly, any additional tariffs the Philippines shoulders because of Trump will probably be recovered substantially, by Manila. How? The US will help the Philippines re-arm itself. Guns and bullets are expensive after all.
Why does the US love the Philippines?
The Philippines is America’s oldest, most stable, and most dependable ally in Asia, reckoned from 1898. The Philippines is the US’ only mutual defense treaty (MDT) partner in Asia, dating back to 1951.
Under the MDT, each party recognizes that an armed attack in the Pacific Area on either of the Parties would be dangerous to its own peace and safety and declares that it would act to meet the common dangers in accordance with its constitutional processes. This is the basis of Trump during his first term and other US officials making assurances of “ironclad” commitment to defend the Philippines from any aggressor, which in today’s geopolitics means China. “The US commitment to its economic and defense alliance with the Philippines is ironclad,” US Defense Secretary Pete Hegseth told BBM during his Manila visit on March 28, 2025.
Assurances
Hegseth repeated those assurances during his talks with President Marcos at the Pentagon July 21, 2025. “Our storied alliance has never been stronger or more essential than it is today and together we remain committed to the Mutual Defense Treaty,” said the US defense chief. “This pact extends to armed attacks on our armed forces, aircraft or public vessels, including our Coast Guard anywhere in the Pacific, including the South China Sea, the Asia Pacific is our priority theater and the US is committed to achieving peace through strength and willing to work with all nations who share this desire in the region.”
Hegseth told BBM in their July 21 meeting: “Under President Trump and your leadership, Mr. President, we’ve made rapid progress enhancing real deterrence and upholding a free and open Asia Pacific through deepening our interoperability and expanding joint exercises, including the largest and most sophisticated exercise Balikatan ever conducted, as well as the Philippines historic participation in Talisman Saber in Australia. We’re also deploying new cutting-edge missiles and unmanned systems and revitalizing our defense industrial bases. Together, we must forge a strong shield of real deterrence for peace, ensuring the long-term security and prosperity for our nations.” (See pages 10-11)
Strategic partnership reaffirmed
Explains super analyst Joey Salceda: “The strategic partnership in security matters between the Philippines and the US has been reaffirmed. Even when aid to Ukraine and deployment in countries like South Korea have been paused or questioned or significantly reduced due to ‘cost considerations’ and ‘fairness’, the Philippine-US defense cooperation agreement has been kept intact and is in fact being considered for expansion.” (See page 18)
“We are getting non-tariff deals, such as the financing for key projects, such as the partnership between the U.S. Trade and Development Agency (USTDA) and the Philippines’ Department of Transportation (DOTr), for technical assistance for the construction of the Subic-Clark-Manila-Batangas (SCMB) Railway. There are more to come,” says Salceda.
Reports the Philippine Star’s Alexis Romero
The 19% duty to be levied on Philippine exports starting August is still higher than the initial 17% announced by US President Donald Trump when he launched what he called the “Liberation Day” tariffs in April.
The new rate is nevertheless the second-lowest in the region, higher only than the 10% slapped on Singapore, which has a bilateral free trade agreement with the US.
“We concluded our trade deal, whereby the Philippines is going open market with the United States, and zero tariffs. The Philippines will pay a 19% tariff,” Trump posted on Truth Social after his bilateral meeting with Marcos last Tuesday. Marcos described the revised rate as a “significant achievement.”
“Now, 1% might seem like a very small concession. However, when you put it into – in real terms, it is a significant achievement,” the President told reporters in Washington before departing for Manila.
“There is more to be spoken about with the United States concerning that the tariff rates and our trade deals,” he added.
No tariffs on US autos
Marcos explained that under the deal, the Philippines will scrap the tariffs on automobile imports from the US.
“Because we have a tariff on American automobiles, we will open that market and no longer charge tariffs on that,” he said.
No duties on drugs, wheat, soy products
The Philippines will buy US exports of soy products, wheat and pharmaceuticals, a setup that – according to Marcos – would lower the prices of medicines in the country.
The Philippine Star quoted a presidential spokesman who claimed that the 19% tariff would not have much impact on the Philippine economy because it is not that dependent on exports to the US.
Presidential Communications Undersecretary Claire Castro said only 16% of Philippines exports are sent to the US, 67% of which are levied with low or zero tariffs under global trade agreements.
Futurely, the Philippines will intensify efforts to make its exports more competitive. “The Philippines is not US export-dependent. In short, there is an effect, but its impact is not huge,” Castro said at a press briefing in Manila.
Why 19% and not 17%
Asked why the US tariff is now 19% when it was originally lower, at 17%, President Marcos told a press conference, “Well, that’s how negotiations go.”
“When we arrived in Washington, tariff rates were 20%,” Marcos recalled. “Why it came up from 17% to 20% is an internal matter with the United States government… So, we tried very hard to see what we can do. And we managed the one (percentage point) decrease in tariff rates,” he added.
A free trade deal in the works
Before Marcos left for the US and during the President’s visit, Special Assistant to the President for Investment and Economic Affairs Frederick Go made a five-day foray into the US to negotiate a bilateral comprehensive economic agreement or a free trade deal with the US.
Earlier, on July 9, 2025, Trump wrote President Marcos Jr. and claimed that the relationship between the Philippines and the US has been “far from reciprocal”, adding the Philippines’ tariff and non-tariff policies and trade barriers have engendered “long-term and very persistent trade deficits.”
US complaints
Indeed, the Office of the US Trade Representative has documented high tariff rates on a number of US export products, corruption at customs, phyto-sanitary restrictions and various barriers to the entry of US goods into the Philippines.
For instance, The Philippines continues to apply high tariffs on finished automobiles and motorcycles. A 30% tariff is imposed on completely built passenger vehicles with capacity of less than 10 persons (i.e. autos and motorcycles). Buses and trucks are slapped 20% tariff. No tariffs are imposed on auto machinery, parts and spares if the importing company is registered with the Board of Investments.
On Jan. 13, 2023, President Marcos signed Executive Order No. 12, eliminating tariffs for completely built-up units of certain electronic vehicles (EVs), including passenger vehicles, buses, minibuses, vans, trucks, motorcycles, tricycles, scooters, and bicycles.
The Executive Order, however, does not include hybrid EVs. Tariffs on certain EV parts and components were also reduced to 1% from 5%. EO 12 is set to expire in 2028.
Customs barriers
The Philippine Bureau of Customs launched its modernization program in 2021 to address customs and corruption concerns. However, reports of corruption and irregularities in customs processing are widespread, including incidents of undue and costly delays, irregularities in the valuation process, 100% inspection and testing of some products, and inconsistent assessment of fees.
In 2020, the Bureau of Customs implemented the Enhanced Value Reference Information System, which is a database of information on the value and classification of imports for reference purposes in support of the implementation of the WTO Customs Valuation Agreement (CVA). Despite the submission of documentary evidence of payments (e.g., contracts, purchase orders, telegraphic transfers, and letters of credits), some importers still report that the Bureau of Customs continues to use reference prices for the valuation of meat and poultry products. (See separate story on pages 14-17)
US has a $4.9 billion trade deficit with PH
The US posted a $4.9 billion trade in goods deficit with the Philippines last year. Marcos said the Philippines would offset the trade deficit by increasing imports from the US.
“That’s part of the new regime that we will be following in terms of trade with the United States,” the President said.
Trump, meanwhile, praised Marcos’ way of handling the talks, calling him a “very good and tough negotiator.”
“We respect their leader greatly… He is very tough for negotiating, but that’s okay,” the US leader said.
‘Principled, pragmatic’
PhilStar quoted Speaker Martin Romualdez saying the development was proof of the administration’s “principled and pragmatic” foreign policy.
“This is more than just an official working visit. This is a statement of confidence: that the Philippines is ready to lead, to compete and to stand tall among nations,” Romualdez said.
“President Marcos has once again proven that our foreign policy can be both principled and pragmatic, firm in defending our interests, but also generous in building alliances that uplift our people,” he said. “Access to the US market is a game-changer,” the speaker pointed out.
Other administration lawmakers lauded the outcome of Marcos’ recent diplomatic engagement with Trump.
“President Marcos Jr.’s engagement with President Trump exemplifies his skillful leadership in advancing the Philippines’ interests on the global stage. His independent foreign policy ensures our nation’s priorities remain at the forefront,” said Rep. Paolo Ortega (La Union).
Rep. Zia Alonto Adiong (Lanao del Sur) also praised Marcos and vowed to “stand firmly” behind his “principled leadership.”
“His ability to maintain strong alliances while prioritizing our sovereignty is a testament to his vision for a stronger Philippines,” Adiong said.
“We agree with President Trump’s observation that an overreliance on any single power would not serve our nation’s interests. President Marcos Jr.’s independent stance ensures we avoid such pitfalls while building robust global ties,” Rep. Jay Khonghun of Zambales said.
“President Trump’s respect for President Marcos Jr. reflects the global recognition of his leadership. We are proud of his commitment to safeguarding our sovereignty and advancing our national interests.” Rep. Lordan Suan (Cagayan de Oro) said. Sen. Vicente Sotto III called the president’s official visit to the US “fruitful and productive.”
Not a fair deal
PhilStar quoted some lawmakers and other groups who expressed alarm over President Marcos agreeing to zero tariff on US exports and a measly one point cut in US tariffs on Philippine products.
Sen. Panfilo Lacson called it “not the most fair deal between decades-old friends or allies like the US and the Philippines.”
“That proposal is the worst insult that a host can throw at his guest. Maybe it is time for us to look for other trade partners,” he added.
Sen. Imee Marcos said that while she has not seen yet the details of the agreement, it’s clear even to non-experts that a 19% tariff on Philippine products and zero rate on the US cannot be considered a fair deal.
“That seems highly imbalanced,” Sen. Juan Miguel Zubiri said of the trade agreement.
Long-term adverse impact
Sen. Francis Pangilinan said the trade deal with US President Trump will have long-term adverse impact on agricultural production and ultimately on the livelihoods of farmers and fisherfolk.
“While we understand the need for economic stability, it should not come at the price of the livelihoods of our agricultural workers. If implemented without careful consideration, a zero tariff policy will disadvantage our farmers and fisherfolk, and put in peril our work toward food security and national development,” Pangilinan said.
“New policies and agreements must come with clear safeguards for local livelihoods. Our farmers need support, not setbacks. They need us to protect them, rather than put their livelihoods at risk,” the senator added.
For Sen. JV Ejercito, President Marcos’ trade deal with US President Trump is “lopsided” and “grossly advantageous” to the Philippines.
“It’s so unfair. I thought the Americans treat as ‘little brown brothers, then why do we always end up at the raw end of the deal,” Ejercito told reporters in Filipino, July 23.
A sellout?
The militant Bagong Alyansang Makabayan said the deal between Marcos and Trump was a sellout of the country’s sovereignty and economic interests.
“It is embarrassing to hear Marcos talk about independent foreign policy and self-reliance while repeatedly mentioning that the US will assist the Philippines in modernizing the country’s defenses and protecting our sovereignty,” Bayan president Renato Reyes said in a statement.
The Alliance of Concerned Teachers (ACT) belittled Marcos’ success in making Trump agree to lower tariff of 19% on Philippine exports.
“This is a lopsided and humiliating agreement, signed while the country is being battered by the effects of Typhoon Crising and the southwest monsoon with millions affected and classrooms submerged,” ACT said.
“The agreement commits the country to a regime of zero tariffs on US goods, opening the floodgates to a new wave of agricultural dumping, foreign retail invasion, and domestic industry displacement,” ACT added.
ACT warned that deal will only worsen job insecurity, erode local livelihoods further, and drain public revenues best spent for rebuilding schools, improving salaries, and supporting communities in crisis.
“The timing of this agreement is damning. With the country reeling from natural calamity, the government abandons its own people to secure a deal dictated by Washington,” ACT said. “We can expect billions to be pledged for foreign military cooperation and trade facilitation as classrooms remain flooded, thousands of students displaced, and teachers expected to serve as relief workers and unpaid crisis responders,” ACT said.
