Marcos of the Philippines set to meet Trump, aiming to finalize a trade agreement
The Philippines, under the leadership of President Ferdinand Marcos Jr., is set to engage in crucial trade negotiations with the USA, scheduled to take place this week. The discussions, which will focus on tariff reductions and the establishment of a unique bilateral trade agreement, come amidst an impending US 20% tariff on Philippine exports, set to commence on August 1.
President Marcos Jr. has expressed his intention to secure zero tariffs on selected US goods, aiming for rates significantly lower than those agreed upon by Indonesia (19%) and Vietnam (20%) with the USA. According to Finance Secretary Ralph G. Recto, the Philippines is proposing a minimum tariff rate of around 10-11% for Philippine exports to the USA.
In addition to tariff talks, the Philippines is also interested in pursuing a Free Trade Agreement (FTA) not only with the USA but with other major economies to expand trade opportunities. This strategic move is intended to foster stronger economic engagement and investment.
The bilateral trade agreement being negotiated is designed to be mutually beneficial and future-oriented, leveraging the unique ties between the two nations. The intended deal aims to ensure collaborations exclusive to US-Philippine relations, further strengthening economic engagement and investment.
The strategic timing of these negotiations is significant, as the Philippines seeks to maintain the USA as a top trading partner, representing a substantial portion of Philippine exports and trade. President Marcos Jr. views these negotiations as essential to advancing national interests and strengthening the alliance, balancing economic and security cooperation.
Manila's status as a key Asian ally is hoped to secure a more favorable trade deal. Gregory Poling, a Southeast Asia expert at Washington's Center for Strategic and International Studies, predicts that a potential trade deal between Marcos and Trump might result in a lower tariff rate than the agreements with Vietnam (20%) and Indonesia (19%).
During his trip, President Marcos Jr. also plans to meet with US business leaders investing in the Philippines. The discussions with Trump are expected to cover not only trade but also security, defense, and other matters of mutual interest.
This marks the first meeting between Trump and a Southeast Asian leader in his second term. The United States had a deficit of nearly US$5 billion with the Philippines last year, and Trump has already struck trade deals with Vietnam and Indonesia. However, Trump this month raised the threatened "reciprocal" tariffs on imports from the Philippines to 20% from 17%.
Before meeting Trump at the White House on Tuesday, Marcos is scheduled to hold talks with Secretary of State Marco Rubio and Defense Secretary Pete Hegseth on Monday. The outcome of these negotiations could significantly impact the economic landscape of both countries and the future of their alliance.
- President Marcos Jr.'s proposition for a minimum tariff rate of around 10-11% for Philippine exports to the USA indicates a strategic aim to secure lower tariffs than Indonesia (19%) and Vietnam (20%) in their trade agreements with the USA.
- Aside from the bilateral trade agreement with the USA, the Philippines is also keen on pursuing Free Trade Agreements (FTA) with other major economies to expand trade opportunities and foster stronger economic engagement and investment.
- The ongoing trade negotiations between the Philippines and the USA, focusing on tariff reductions and the establishment of a unique bilateral trade agreement, are significant as they come amidst an impending US 20% tariff on Philippine exports, set to commence on August 1, and the Philippines seeks to maintain the USA as a top trading partner.
