ASEAN to discuss unified stand on US tariffs

The Philippines is eyeing to lead the regional discussions to come up with a unified stance on the US reciprocal tariffs through its Association of Southeast Asian Nations (ASEAN) chairship, the Department of Trade and Industry (DTI) said.

Trade Secretary Ma. Cristina A. Roque said that the US tariffs will be among the topics that the trade ministers will discuss next month.

The ASEAN senior economic ministers will hold a retreat in Manila on March 13.

“We haven’t spoken with the other members of ASEAN because for now we are really focused on the ASEAN chairship,” Ms. Roque told reporters on the sidelines of the ASEAN Editors and Economic Opinion Leaders Forum on Tuesday.

Over the weekend, US President Donald J. Trump announced that he will be imposing a new 15% duty on US imports starting Feb. 24.

However, Reuters reported on Tuesday that the US imposed an additional 10% tariff on all goods not covered by exemptions, citing a notice issued by US Customs and Border Protection said.

The Financial Times quoted a White House official saying the increase up to 15% would come later. Reuters could not immediately confirm this.

Mr. Trump’s new tariff policy comes after the US Supreme Court ruled that he had exceeded his authority when he imposed the reciprocal tariffs.

The ruling had invalidated the tariffs imposed by the Trump administration on China, Japan, South Korea, Taiwan and ASEAN economies. Most Philippine-made goods had faced a 19% US tariff.

Finance Secretary Frederick D. Go said that the Philippines is still in a good spot, despite the US tariff developments, as the country continues to dialogue with counterparts in the US.

“So, we continue to engage with them. As I always say, so far, the majority of our semiconductors are exempted, and the majority of our key agricultural exports are exempted,” he said on the sidelines of the event.

“So, I’d say we are in a good spot, but of course we will continue to engage with our counterparts there, which is the US Trade Representative,” he added.

Sought for comment, Philippine Exporters Confederation, Inc. President Sergio R. Ortiz-Luis, Jr. said that a collective response from ASEAN will be good not only for the Philippines but for the region as a whole. 

“That would be nice because that is where the collective call for exemptions on agricultural products and for the tariff on electronics to be put on hold,” he told BusinessWorld in a phone interview.

“If we can negotiate, regionally, the exemptions, that is also better. So, we should not stop talking to them,” he added.

However, Mr. Ortiz-Luis said that exporters are still in the dark about whether or not the new US tariff will be imposed on the Philippines.

While the country already agreed to a 19% reciprocal tariff, there was no final deal that was signed.

Reuters reported that Mr. Trump had earlier warned countries that if they backed away from signed trade deals with the US, they may be slapped with the higher duties.

“Some people are saying that those who agreed to tariffs higher than the 15%, which include us as we agreed to 19%, will not be covered by the 15% tariff,” he said.

“And on exemptions, it will be better if the exemptions are kept; so much the better, but nobody knows if Trump will remove the exemption,” he added.

If the exemptions are removed, especially on semiconductors and some electronic products, Mr. Ortiz-Luis said that electronics companies might move to other markets that are more competitive.

“At 10% we are still okay, but at 15%, we don’t already know what the supply chain will do. Until it is very clear, we should not stop talking with them,” he added.

Meanwhile, Ms. Roque said the talks with US counterparts have been continuous despite recent developments, but discussions on exemptions have not yet started.

“We have not spoken about that, but of course once there are changes, we will discuss, and then definitely we will give out a statement. But for now, we are just still in talks,” she said.

She said that the department is still hopeful of seeing $116 billion to $120 billion in total exports this year, aligned with the target set under the Philippine Development Plan.

Meanwhile, Mr. Go said that what the US reciprocal tariffs revealed is the need for the Philippines to find new markets.

“We have to create new markets for the Philippines to trade with, to sell to, which is why the activities being engaged in by the economic team and by DTI, like signing more and more economic partnership agreements and free trade agreements, are really important for our industries to be able to grow,” he added. — Justine Irish D. Tabile, Senior Reporter