Washington: The Philippines is actively pursuing negotiations to reduce the 12.5 percent tariff imposed by the United States on its exports, following allegations of failure to curb the importation of goods produced with forced labor. Philippine Ambassador to the U.S. Jose Manuel Romualdez communicated via text message that Manila aims to lower the tariff to at least 10 percent, noting that ongoing discussions are underway. Despite the current rate being lower than the previous 19 percent tariff, which was nullified by the US Supreme Court, the Philippines is determined to negotiate further reductions. Ambassador Romualdez emphasized that the removal of child labor-produced goods from export lists could be a basis for these negotiations, with Trade Undersecretary Allan Gepty leading the negotiation team.
According to Philippines News Agency, the US Trade Representative (USTR) announced on Friday that tariffs are being applied to 60 economies, including the Philippines, due to inadequate enforcement of prohibitions on importing goods produced with forced labor. In response, Department of Trade and Industry Undersecretary Ceferino Rodolfo highlighted in an online briefing that the Philippine government has bolstered regulations against illegal labor practices. He acknowledged the new tariff but reassured stakeholders of ongoing engagements with the USTR, mentioning a joint administrative order signed by key Philippine secretaries to establish guidelines on investigating and banning goods linked to forced labor.
Rodolfo further explained that the Philippines adheres to international labor standards to maintain the competitiveness of its products and businesses. The signing of a joint administrative order by Philippine Trade Secretary Ma. Cristina Roque, Finance Secretary Frederick Go, and Labor and Employment Secretary Francis Tolentino aims to uphold labor rights and is seen as a positive step in discussions with the U.S.
In the business sector, Philippine Chamber of Commerce and Industry President Perry Ferrer stated that the new tariff could affect competitiveness and emphasized ongoing investigations into sectors implicated in forced labor allegations. Meanwhile, Federation of Philippine Industries Chairperson Elizabeth Lee viewed the reduction from 19 percent to 12.5 percent as a positive development, though she acknowledged the Philippines still faces a competitive disadvantage compared to regional peers like Indonesia and Malaysia. Lee suggested that further tariff reductions might be possible by demonstrating compliance with forced labor regulations, potentially moving to a 10 percent tariff or securing product waivers.
