PHL wary of losing exemptions if Trump’s uniform 15% tariff sticks

By Beatriz Marie D. Cruz, Reporter

THE uniform 15% US tariff could have a negative impact if the Philippines loses the exemptions it negotiated hard for, a former tariff commissioner said.

“If those exemptions are not going to be retained under the global tariffs, under Section 122, then we would, I think, be worse off,” Former Tariff Commissioner George N. Manzano said on Monday on the Money Talks with Cathy Yang program on One News.

US President Donald J. Trump announced on Saturday a 15% tariff on all imports, claiming authority from Section 122 of the Trade Act of 1974.

The law allows the President to impose a maximum 15% import surcharge for 150 days, unless extended by legislation.

The US Supreme Court ruled that Mr. Trump had exceeded his authority when he imposed his previous tariff regime, for which he cited the International Emergency Economic Powers Act of 1977.

The Department of Finance  has said that the majority of Philippine exports to the US — like semiconductors and key agricultural goods — had won exemptions before the Supreme Court ruling.

“The real issue isn’t the tariffs themselves — it’s the uncertainty. When US trade policy keeps changing, companies delay investments, slow hiring, and hold back expansion, and that spills over to us,” Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said via Viber.

Efforts to diversify Philippine export markets should be part of the country’s long-term solution, Mr. Manzano said.

“It will be like a dominant strategy that we need to do regardless of what the US does, because it will give us some bit of certainty when it comes to trade,” he said.

Mr. Manzano also noted that uncertainty surrounding trade with the US is the “new normal.”

“Just as we think we are already settling in a new normal, then there are these new issues that come up, and business would like really to have a predictable environment,” he said.

Some investors are for the moment more focused on oil prices with the US and Iran poised to meet this week to hash out a possible nuclear deal, which is seen as a sign of easing tensions after a highly publicized US military buildup in the region.

“What we’re really watching out for is really the US-Iran (talks),” and whether the situation escalates “into something worse,” Sunlife Investment Management and Trust Corp. President Michael Gerard D. Enriquez also said on Money Talks with Cathy Yang.

“That would have a more direct effect on the Philippines in terms of oil inflation that would trigger again some uncertainty on the economy’s recovery.”

The next US-Iran talks will be held on Feb. 26 in Geneva.