The United States and the Philippines struck a provisional trade accord on July 22 after a face-to-face at the White House between Philippine President Ferdinand Marcos Jr. and U.S. President Donald Trump.
In a Truth Social post, Trump said the U.S. would trim its threatened tariff on Philippine goods to 19%, down from the 20% announced on July 9. Meanwhile, Manila agreed to “widen market access” for U.S. products and waive duties on a yet-to-be-published list.
Tariff clock ticks toward August 1
The reduced rate still sits two points above the 17% proposed in April and takes effect August 1, giving exporters less than two weeks to adjust. Economists say the sudden hike could shave roughly a percentage point off export-sector growth and rattle investor confidence.
Marcos arrived at Joint Base Andrews on July 20 and became the first ASEAN leader Trump has received since the latter’s return to the White House in January. The visit aimed to defuse a looming tariff hike that could reshape the country’s export trade with the U.S.
Last year, the United States bought $12.14 billion in Philippine exports, roughly 16% of the country’s total. “We do a lot of business with you… There’s a lot of income coming in for both groups,” Trump told Marcos, adding that the numbers will grow even more with what they were proposing.
Specific product schedules and enforcement details remain unclear, leaving analysts unsure how the compromise will affect either economy. Meanwhile, Trump hinted that the agreement would deepen military cooperation, underscoring both nations’ interests in closer security and economic ties as Indo-Pacific geopolitics shifts.
PH’s high-stakes rescue mission
Marcos arrived in Washington armed with a “menu of offsets.” Options on the table listed on the draft agreement include deeper U.S. access to Philippine defense facilities under the Enhanced Defense Cooperation Agreement, preferential mineral rights, and zero tariffs on select American farm goods in exchange for shelving, or at least delaying, the levy.
Finance Secretary Ralph Recto says Manila also pushes for a free trade agreement (FTA) with the U.S. and “other willing partners” to broaden markets and lock in reduced rates on garments, semiconductors, and tropical fruits. However, he acknowledged that only a framework is possible before the August 1 deadline.
BPO industry braces—but spots an opening
Although the tariff targets physical goods, the Philippines’ flagship business process outsourcing (BPO) industry is watching closely. Senator Sherwin Gatchalian warns that higher costs could push U.S. clients toward cheaper ASEAN rivals, threatening millions of call center jobs. He advocates emergency tax breaks and aggressive upskilling.
Yet industry leaders remain cautiously optimistic. Jonathan Madrid, president of the Information Technology and Business Process Association of the Philippines, still projects $40 billion in sector revenue this year.
Complex fintech, healthcare, and analytics work, insulated from commodity tariffs, fuels his optimism. Madrid argues that continued reskilling and pivoting to higher-value global capability centers can keep the Philippines competitive despite renewed protectionism.
With barely 10 days before the new tariff kicks in, negotiators face a tight deadline. Slightly lower duties in exchange for defense pledges or wider U.S. market access could calm investors and protect jobs on both sides of the Pacific. Failure risks testing the 73-year U.S.–Philippine alliance with higher shipping costs, disrupted supply chains, and economic shockwaves.
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Adonis, M. (2025, July 21). Marcos arrives in U.S. for crucial tariff talk. INQUIRER.net. Retrieved July 22, 2025, from https://globalnation.inquirer.net/285454/marcos-arrives-in-us-for-crucial-tariff-talk
Briones, J. A. (2025, May 1). Philippine senator urges action as U.S. tariffs threaten BPO jobs. Outsource Accelerator. Retrieved July 22, 2025, from https://news.outsourceaccelerator.com/u-s-tariffs-threaten-bpo-jobs/
Jazeera, A. (2025, July 21). Philippines’ Marcos to meet Trump seeking trade deal. Al Jazeera. https://www.aljazeera.com/news/2025/7/21/philippines-marcos-to-meet-trump-seeking-trade-deal
