Recto rules out retaliation after higher US tariffs

Finance Secretary Ralph Recto. Photo by Geremy Pintolo

MANILA, Philippines – Finance Secretary Ralph Recto said retaliation was not an option for the Philippines in tackling the “Liberation Day” tariffs that United States President Donald Trump imposed on Filipino goods, leaving the country with two options: negotiate or keep the duties untouched.

The former could possibly force the Philippine government to make concessions, like bringing down the tariff rate it charges on American goods coming to the country, in a bid to strike a trade deal with Trump.

But Recto told the Inquirer there were no plans to lower the tariffs on imported US goods “for now.”

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“We are focused on improving trade and investments with all trading partners and making it easier for investments to come to the Philippines,” he said.

“In any crisis, there are opportunities.”

As it is, the possibility of reducing the duties slapped on imported US goods was already floated by Trade Secretary Ma. Cristina Roque herself.

And many analysts believe that Manila is in a better position to negotiate with Washington after Trump unveiled a milder 17-percent tariff on Filipino goods, among the lowest in Asia.

This was still lower than the 34 percent that the Philippines charges on inbound shipments from the United States, including the estimated cost of nontrade barriers. For his part, Recto said the tariffs imposed by the Philippines on US goods were only between 5 to 6 percent on average.

In the region, Bloomberg reported that Vietnam was willing to remove all tariffs on US imports after Trump had announced that Vietnamese products entering America would be slapped with a punitive 46-percent levy.

On the other hand, China announced on Friday a 34-percent retaliatory tariff against US imports.

As it is, a tariff cut on imported American goods might affect the ability of the Bureau of Customs to hit its collection target of P1.1 trillion for this year—a goal that was meant to help reduce the budget deficit of the government.

To be fair, Roque had said that the government would “stick” to the 17-percent tariff imposed by the United States on Filipino products until the Marcos administration hatches a big plan.

Recto, meanwhile, said the relatively softer tariff on Philippine goods can work to the country’s advantage.

“The substantial difference in tariff rates makes the Philippines more competitive and attractive for investments,” he said.