The Philippines’ exports are unlikely to stay competitive if the US reinstates a 17 percent tariff, especially after Vietnam secured a favourable 20 percent rate under a new deal with Washington, according to the Foreign Buyers Association of the Philippines (FOBAP)→view source.

Key details:

FOBAP President Robert M. Young said Vietnam already benefits from lower wages and better infrastructure, resulting in a 10-15 percent lower free-on-board price compared to the Philippines.
He said the Philippines would struggle to compete in a “price war” and called for urgent reforms to keep the country attractive to foreign buyers
Young suggested that if the Philippines keeps its tariff at 10 percent, it may provide some relief but still not enough to match Vietnam.
Philippine Institute for Development Studies Emeritus Research Fellow Rafaelita M. Aldaba stressed the need for investment in infrastructure, market access negotiations, and sector-specific reforms to strengthen competitiveness.
Philippine Chamber of Commerce and Industry (PCCI) President Enunina V. Mangio urged improvements in supply chains, technology, and efficiency to offset higher costs and possible tariff impacts.

This highlights how the Trump tariffs aren’t just a bilateral issue between the US and individual countries like Vietnam or the Philippines but also has regional implications.

By giving Vietnam a relatively favourable deal (20 percent rather than 46 percent), the US has effectively tilted the playing field in Vietnam’s favour.

The Philippines now faces pressure to either secure similar tariff concessions, rapidly cut production costs, or find ways to strengthen its value proposition to buyers.

That is to say, Vietnam’s deal could also be seen as setting off a race to the bottom in the region, where countries compete to offer lower tariffs, cheaper production costs, and more concessions just to maintain access to key markets like the US.

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