By Justine Irish D. Tabile, Reporter
THE PHILIPPINES needs to better exploit the opportunities arising from the US imposition of tariffs on Chinese goods, the US Chamber of Commerce (USCC) said.
John Patrick Goyer, USCC executive director for Southeast Asia, told BusinessWorld that the Philippines should take advantage of tariffs ranging from 7.5% to 25% that the US applied on goods coming from China starting 2018.
He said that Southeast Asia currently enjoys a cost advantage that can be leveraged during the ongoing trade war between the US and China.
“What that means for other countries, especially those in Southeast Asia, is that they suddenly have a cost advantage and especially if particular goods coming from China faces a 25% tariff. Those same goods from the Philippines face a much lower tariff,” he said.
However, Mr. Goyer said that the Philippines has yet to systematically exploit its tariff advantage.
“To date, we haven’t really seen that happen for the Philippines, while Vietnam, I think, is widely perceived as having benefited the most from the trade rift,” he said.
“But the fact is that Vietnam didn’t grow its exports dramatically to the US after the trade war started. Other ASEAN countries have been able to do the same to varying degrees, but the Philippines really has not,” he added.
He said the Philippines must start asking why it has not seen a ‘dramatic growth’ in its exports to the US and start thinking about where its suppliers can step in.
“And you know, this could be any number of products and for those where the Philippines has manufacturing capacity and capability,” he added.
He said Vietnam has substantial production capability, especially in electronics.
“But I think that in a wider range of products, not necessarily in information technology hardware, but in other sectors (such as) machines, tools, home goods, all the sorts of things that American consumers buy at Walmart or Target or Home Depot, I have to believe that there is an opportunity there for Philippine suppliers to step in,” he added.
He said even at a tariff disadvantage, China “remains the only cost-effective supplier in the near term” for many goods, he said.
“(But) if those tariffs remain in place for the longer term, and I suspect that they’re going to be around for a while, that gives the Philippines I think, a longer window to look at how it might be able to step in and supply some of those goods where… it makes commercial sense,” he added.
US goods and services and services trade with the Philippines totaled $36.1 billion last year, $23.3 billion of which consisted of US imports from the Philippines, according to the office of the US Trade Representative.
Some $16.2 billion of the imports from the Philippines consisted of goods while $7.1 billion were services.