Trump announces trade deals with Philippines and Japan, with lower tariff rates
Japan to face lower 15% tariff from 25%, Philippines faces lower 19% tariff
[MANILA] US President Donald Trump said the US reached an agreement with the Philippines setting a 19 per cent tariff on the country’s exports, the latest pact ahead of an Aug 1 deadline.
Trump initially imposed a 17 per cent rate for the US ally in April, which was paused to allow time for negotiations. He then threatened earlier this month to raise the charge to 20 per cent.
Separately, he also announced a trade deal between the US and Japan, which includes a 15 per cent tariff that will be levied on Japanese goods. Trump had previously threatened Japan with a tariff of 25 percent beginning August 1 if a deal was not reached.
He said that under the deal, “Japan will invest, at my direction, $550 Billion Dollars into the United States, which will receive 90% of the Profits.”
Trump announced both deals on social media on Tuesday (Jul 22).
“The Philippines is going OPEN MARKET with the United States, and ZERO Tariffs. The Philippines will pay a 19 per cent Tariff. In addition, we will work together militarily,” Trump wrote on social media on Tuesday.
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The president did not provide additional details about the trade understanding.
Trump hit dozens of trading partners with higher tariffs in April, only to quickly put them on hold for 90 days amid market backlash in order to work out agreements. But that stretch saw the US finalise only a handful of deals and Trump instead moved to unilaterally impose rates on countries and blocs ahead of his new Aug 1 deadline.
While the US president and his advisers initially suggested they planned to hold concurrent talks with trading partners, Trump has shown little patience for back-and-forth negotiations, instead saying his preference was to just set rates for other economies.
In recent weeks, he has sent a slew of letters setting tariff levels and is also moving ahead on industry-specific levies that will target sectors such as copper, semiconductors and pharmaceutical drugs. While talks continue with major economies including the European Union and India, Trump said some 150 smaller countries will be hit with a blanket rate of between 10 and 15 per cent.
Marcos was the latest foreign leader to visit Trump in a bid to secure lower duties and had sought to underscore his country’s longstanding alliance with the US to argue for better trade terms from the Philippines’ top export market.
But the inability to secure a larger cut highlights how Trump’s tariff agenda has left America’s allies exposed to the US president’s bid to reshape global trade flows – even as he seeks a broader trade truce with the nation’s chief adversary, China.
Prior to the Trump-Marcos meeting, Philippine trade officials had flown to Washington for talks with their counterparts on an agreement.
The US held a trade deficit with the Philippines of US$4.9 billion last year with total trade at US$23.5 billion, according to US government data. The Philippines has previously said it could not offer the US a zero tariff, as Trump said Vietnam and Indonesia have done, because it would hurt domestic businesses, but was planning to increase imports of US farm goods, including soybeans and frozen meat, and boost exports of semiconductors, coconut and mango products to the US. BLOOMBERG
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