EXPLAINER: How will the US-imposed tariffs affect the prices of branded bags, shoes, and other products in the Philippines?
US president Donald Trump slapped tariffs on goods from different countries, including the Philippines at 17%.
As stated in an X post by the White House, the rate is lower compared to that in other Southeast Asian countries like Cambodia (49%), Vietnam (46%), Myanmar (45%), Indonesia (32%), Thailand (36%), and Malaysia (24%). Singapore, meanwhile, will have a baseline 10% tariff.
At a Congress joint session, Trump pointed out that tariffs will revive manufacturing and create more jobs in the United States. He added that they will make America "rich again" by encouraging the people there to purchase more goods made in America.
Tariffs: What they mean, how they work
Gil Beltran, president of the Philippine Tax Academy and former chief economist and undersecretary at the Department of Finance, told PhilSTAR L!fe that tariffs are taxes imposed on imported goods. "They are paid by the importer upon claiming an imported product from the customs bureau," he said.
Beltran explained that the tax rate is usually based on the value of an item. "For example, if the rate is 17%, a product with import value of P100 will pay P117. If the US imposes a 17% tariff on the Philippine export, the American importer will pay 10% of the value of the product."
According to JC Punongbayan, an economist and assistant professor at the University of the Philippines Diliman's School of Economics, such added costs are "typically passed on to consumers, either fully or partially."
While Trump thinks this move will boost the US industry, Punongbayan believes it's unlikely to be the case. "This is because the vast majority of consumer products are hardly ever done in just one place," he explained. "We live in a globalized world, and the US can't isolate and produce most things by itself."
How the US-imposed tariffs can affect Pinoys
Punongbayan pointed out that Pinoys might feel the impact of tariffs as they can affect even the usual products that Filipinos shop for—like branded bags, clothes, and shoes, which are part of complex global supply chains. "Many of these are assembled in China and sold worldwide. Tariffs disrupt these supply chains and may lead to higher prices even across markets like the Philippines," he said.
"If the Philippines does not retaliate, the prices of products for sale in the Philippines will not be affected," explained Beltran. "But if we buy products from other countries with imported components from countries affected by the US tariffs, there may be price increases because their production costs increase."
For example, Footwear Distributors and Retailers of America president, Matt Priest, said in a CNN interview that sneaker prices could rise by up to 45% due to tariffs. "If brands like Nike or Adidas spread that cost globally, we might see similar increases here. A pair that used to cost P5,000 could shoot up to P7,000 or more, but we can’t be too sure about the figures just yet," Punongbayan told L!fe.
The prices of tech products like iPhones, laptops, and other devices were also initially seen to double or triple with the escalation of tariffs, which Punongbayan said will make them "significantly more expensive in the Philippines." The Trump administration, however, announced it's exempting electronics from its import tariffs, benefitting US tech firms such as Dell and Apple, with the latter's supply chain largely based in China.
According to Punongbayan, if the US puts a tariff on PH goods, it means our exports to the US "will become more expensive there, which could hurt our exporters as US buyers might look for cheaper options elsewhere."
Beltran, however, noted that Trump's new tariff order likewise presents opportunities as the Philippines does not only sell items to the US but to the whole world. "We can handle shocks like these, look for other markets, and diversify them."
It's consistent with what National Economic and Development Authority secretary Arsenio Balisacan said in a press conference on Monday, April 14. "Just like our diplomacy, but also at the same time, we should leverage with other partners. I think the trick is for us to also ensure that our economy is not too vulnerable to any particular country. So we should, even at this point, also be developing other markets," he said.
"We can and we should take this as a push to expand the diversity of our exports, the diversity of our export destinations, so that we don't become very vulnerable to any particular shock," he added.
