"I thought I won!"
From all indications, it is Manila's military and security value that was the only bargaining chip of President Marcos in his recent US visit. The country's trade value added is minuscule. Its exports to the US, mainly consisting of semi-con and other electronic products, have very close substitutes. The US can always argue that even if Manila's reciprocal tariff is at 20%, its trade exposure index could could be limited because a good portion of US imports from the Philippines is tariff-exempt.
Working on a more reasonable tariff rate is important. But it is also imperative for the Philippines to capture relocation and supply chain shifts as the US and China trade war intensifies. Manila should prepare, and prepare seriously, to host all the companies fleeing from China and other high-tariff countries in electronics, semi-conductor packaging, production of converters, power supplies and telecom devices. China and other countries have lower tariff exemption coverage. In making this effort, as some observers also suggested, the Philippines also ought to pursue industrial upgrading and resilience building, as well as trade defense.
Growing its trade importance could very well reinforce Manila’s ability to negotiate trade concessions. Otherwise, it will only continue to serve the US and other bigger powers’ military and political ends. Trade may just become a side issue. And that is even more tragic when the government, like Pacquiao, might be claiming it thought it was ahead but actually, it was not.
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