The United States (US) has reduced its tariffs on Philippine (PH) goods by 1%. This follows the latter’s decision to open its trade market to selected US products with zero duties, particularly automobiles.
The development was confirmed after a meeting between Philippine President Ferdinand Marcos Jr. and US President Donald Trump in Washington, DC, where both leaders discussed trade reforms aimed at strengthening bilateral economic relations.
Under the agreement, the Philippines will ease its imposed tariffs on certain US-made goods, notably passenger vehicles, which previously faced a 30% import duty. Buses and trucks, which had been subject to a 20% tariff, are also included in the market liberalization effort.
The United States had earlier noted in its trade reviews that the Philippines imposes relatively high tariffs on finished vehicles and motorcycles. The decision to reduce these duties is expected to encourage more automotive imports from the United States.
In return, Washington has lowered its tariff rate on Philippine exports to 19%. Though the cut may appear modest, President Marcos Jr. described it as a notable step, citing the historical relationship between the two nations as a basis for the concession.
Stemming from the rich history, the Philippines today is still maintaining its good diplomatic and economic ties with the US. The just-concluded trade talks are proof of this, and that the Philippines is not feeling the biggest blows of the so-called “trade war” of tariff hikes President Trump has imposed on many of its neighboring countries.
What this means for the local car industry is that US-made vehicles may enjoy price rollbacks if, or when, the agreement takes effect. Among the US-made vehicles available in the Philippines are the Ford Bronco, Mustang, Explorer, as well as the Chevrolet Tahoe, Chevrolet Suburban, and the Subaru Evoltis, among others.
A probable result of this is that US-made cars have a more competitive chance of being purchased by more Filipinos, effectively shifting the local market preferences. Seeing the market’s focus today on imported/manufactured goods from such nations as China, Korea, and Japan, this new US-PH trade agreement may affect the automotive market, but not significantly, since the segment of US-imported vehicles isn’t as substantial as the others.
Of note, officials from both sides signaled that discussions on trade matters remain ongoing and may evolve further based on global economic conditions.
