19% Tariff on Philippine Products - A Piece of the "Encirclement of China" Puzzle? The New US-Philippines Trade Agreement and Its Link to Security

1. 19% Indicated in "Beautiful Visit"

"The Philippines will have to pay a 19% tariff. It's a win-win as it opens the U.S. market with zero tariffs," declared President Trump on July 22 in the Oval Office of the White House. The president, who had been hinting at 20% until just before, emphasized the 1-point concession as a "big deal" and showcased a handshake with President Ferdinand Marcos Jr.

2. Just 1%, Yet 1%

The current 19% is higher than the 17% set in April and appears as a "practical tax increase" to market participants in Manila who were hoping for the reinstatement of the Generalized System of Preferences (GSP) last year. Nevertheless, it is lower than the 20% that Trump had been intimidating with. "Even 1% actually moves hundreds of millions of dollars," Marcos stated at a press conference, proudly claiming to have advanced the 80-year U.S.-Philippines alliance.

3. Background: South China Sea and "August 1 Deadline"

The U.S. administration has publicly stated that it will settle tariff renegotiations with Asian countries by August 1, listing figures such as 15% for Japan, 19% for Indonesia, and 20% for Vietnam. Behind this is the construction of a multilateral "encirclement" to check China. AP News points out that "not only tariffs but also military cooperation packages are linked," and reports that the Chinese Ministry of Foreign Affairs immediately warned that it would "destabilize the region."AP News

4. Reaction in the U.S.—"It's American Companies That Pay"

U.S. political journalist S.V. Dáte corrected the facts on X (formerly Twitter), stating that "it's not 'the Philippines pays,' but U.S. importers bear the cost," receiving over 9,000 likes.X (formerly Twitter)
Additionally, under the hashtag #Tariffs, sarcasm spread with comments like "bragging about just a 1% cut" and "it ultimately rebounds on American consumer prices."X (formerly Twitter)

5. Philippine Social Media—Pros, Cons, and Self-Deprecation

Philippine broadcast journalist Tristan Nodalo reported on the president being praised as "historic" even for a 1-point reduction, while international political scientist Anna Malindog-Uy criticized it as a "typical economic surrender."X (formerly Twitter)X (formerly Twitter)
On X, memes questioning "17→20→19% and a victory declaration?" became popular, with posts questioning the Marcos administration's negotiating power standing out.X (formerly Twitter)

6. Impact by the Numbers

• The total U.S.-Philippines merchandise trade in 2024 is $23.5 billion, with a U.S. deficit of about $5 billion.Reuters

• Semiconductors and electronic components account for 16% of Philippine exports, and the 19% tariff could ripple through the supply chain.Reuters

• The Philippine government indicates an outlook to expand imports of U.S. cars with "zero auto tariffs," but domestic industry protectionists do not hide their caution.AP News

7. Expert Perspective—"Deal of the Weak"

The Australian newspaper analyzes that "ASEAN countries, inferior in economic scale, have limited negotiating power," and the latest forecast from the Asian Development Bank (ADB) also indicates "growth downside due to export slowdown."The Australian
Professor Roberto de la Cruz, an economist at the University of the Philippines, told this magazine that "even if the 1% reduction is symbolic, it can be accepted if viewed as a security cost to reduce dependence on China."

8. Future Points of Discussion

1. Congressional Approval: Some Democratic members of the U.S. Congress are calling for hearings citing "increased consumer burden."

2. Regional Chain: Malaysia is negotiating from 25% to ?%, aiming for "below 19%."Reuters

3. China's Response: If the risk of conflict at Scarborough Shoal in the South China Sea increases, the expansion of U.S.-Philippines military exercises is inevitable.