By Ray Talimio Jr.
The 17%–18% tariffs imposed by the United States on our country’s exports are no longer just a headline—they are now a full-fledged disruption. While we may be “less hit” in tariff percentage terms compared to Vietnam (46%) or Thailand (36%), we are arguably the most exposed because of our narrow export base, infrastructure gaps, and lack of trade agility.
Now that the policy shock has landed, the question becomes: what do we do next—both as a country and as part of ASEAN?
One viable path, at least in the short to medium term, is to increase intra-ASEAN trade. This is not a theoretical solution. It is both viable and necessary, especially if we hope to cushion the impact of lost demand from traditional markets like the U.S. ASEAN already offers zero tariffs for over 98% of goods traded under the ASEAN Trade in Goods Agreement (ATIGA). Yet intra-ASEAN trade still hovers at just 22–24% of total regional trade, far behind the European Union’s 60%.
For our country, this means seeing ASEAN not merely as a diplomatic bloc but as a real market and integrated supply chain. The Department of Trade and Industry (DTI), along with the Department of Agriculture (DA), Board of Investments (BOI), and the Bureau of Customs (BOC), must work double time to enable Filipino exporters to plug into this network. That involves reducing non-tariff barriers, standardizing certifications, improving logistics, and building up sectors where we already have competitive potential—like processed food, agri-products, digital services, construction materials, and electronics components.
But policy pronouncements are not enough. The President must immediately issue an executive order directing the formulation and implementation of a National Intra-ASEAN Export Strategy. This should clearly define agency deliverables and set measurable targets—such as faster customs clearance for ASEAN-bound goods, more aggressive trade missions within the region, and expanded government support for MSMEs entering regional markets.
At the same time, DTI, DA, and DOST must fast-track support programs for regional MSME exporters, including grants for packaging, product certification, compliance upgrades, and participation in digital trade platforms. For Mindanao and Palawan, the government must activate the BIMP-EAGA trade corridors more aggressively, promoting sea links and cross-border integration with Malaysia, Brunei, and Indonesia.
Beyond short-term fixes, our country must build long-term trade resilience. This means investing in logistics infrastructure like cold storage hubs, multimodal freight connections, and digitized port systems in export hubs like Davao, Cagayan de Oro, and General Santos. The medium-term plan should include legislation—particularly amendments to the Customs Modernization and Tariff Act (CMTA)—to harmonize ASEAN trade facilitation rules and remove procedural delays. Congress should also consider creating an Intra-ASEAN Trade Facilitation and Competitiveness Fund to provide fiscal support for MSMEs and key regional industries affected by global trade volatility.
While we look inward to stabilize our position in ASEAN, we must also look outward with greater assertiveness. Our failure to renew the U.S. Generalized System of Preferences (GSP)—which lapsed in 2020—is a glaring example of diplomatic passivity. That program allowed more than 5,000 of our country’s products duty-free access to the U.S., and its expiration has quietly chipped away at our competitiveness. DTI and DFA must immediately mount a diplomatic campaign in Washington, supported by the private sector and Filipino-American business networks, to lobby Congress for our reinstatement under GSP. Simultaneously, the government should explore bilateral Free Trade Agreements with other key markets where ASEAN-wide deals are stalled, such as the EU, the Gulf Cooperation Council (GCC), and the United Kingdom.
Across ASEAN, stronger regional coordination is needed. The ASEAN Secretariat should push for the full operationalization of the ASEAN Single Window and introduce fast-track mechanisms for resolving non-tariff barrier disputes. There is also a case for establishing a regional Export Resilience Fund for MSMEs affected by external shocks like the recent U.S. tariffs.
Let’s be clear: this isn’t a problem our country alone is facing. But the difference lies in how each country responds. Vietnam, despite its 46% tariff hike, still enjoys massive investor confidence, partly because it offers scale, FTAs, and a forward-looking export ecosystem. In 2023, Vietnam exported over $116 billion to the U.S.—nearly ten times more than our $11.8 billion. In 2024, our exports to the U.S. increased slightly to $12.12 billion, but that only accounted for 16.6% of total exports. Electronic products, which form 56% of our outbound shipments, fell by 6.7% in value, and semiconductors plunged by 13.5%. Overall, we posted a 0.5% decline in total exports and a wider trade deficit of $54.2 billion.
Other ASEAN neighbors—Malaysia, Thailand, even Cambodia—have quietly built more efficient customs systems, diversified their product offerings, and secured better access to global markets. They too will feel the sting of Trump’s tariffs, but their capacity to adjust and absorb the shock is far greater. Our country, on the other hand, risks becoming a forgotten player in global trade unless we act decisively.
The Management Association of the Philippines (MAP) has rightly called for the creation of an Economic Security Council to monitor the impact of the tariffs and provide coordinated responses. That council must not become another interagency echo chamber—it must be empowered to mobilize real support, shape legislation, and enforce results on the ground.
We cannot treat these new tariffs as another passing disruption. They are part of a broader, more volatile trade environment that will test our readiness, resilience, and resolve. In this new world of “reciprocal tariffs,” competitive trade policy is not just about tax rates—it’s about infrastructure, diplomacy, credibility, and national coherence.
We may be least hit today, but that means nothing if we remain least prepared tomorrow.
The author, Ray Talimio Jr., is the Co-Chairman of the Economic Development Committee of the Regional Development Council-X (RDC-X), Chairman of the MSME Development Council of Misamis Oriental and Cagayan de Oro City, and Chairman of BIMP-EAGA Northern Mindanao Region.
Disclaimer: The views expressed in this column are those of the author and are protected under Article III, Section 4 of the 1987 Philippine Constitution. They do not necessarily reflect the positions of the institutions the author is affiliated with.
SOURCES:
– Philippine Statistics Authority (https://psa.gov.ph)
– U.S. Census Bureau (https://www.census.gov/foreign-trade/balance/c5650.html)
– Asian Development Bank Report 2023
– BusinessWorld (https://www.bworldonline.com)
