Despite weeks of high-stakes negotiations, the US offered only a symbolic concession in the trade deal clinched by Philippine President Ferdinand Marcos Jnr as he wrapped up his Washington visit on Tuesday, only agreeing to lower threatened tariffs from 20 per cent to 19 per cent.
“It was a beautiful visit, and we concluded our Trade Deal, whereby The Philippines is going OPEN MARKET with the United States, and ZERO Tariffs. The Philippines will pay a 19% tariff,” Trump said, announcing the cut on his social media account.
The deal has not yet been confirmed by Manila. Marcos left the White House without making any public remarks about a deal. No joint statement from the leaders’ meeting has been issued yet by either side.
Securing a favourable trade deal to shield Philippine exports from the looming economic blow was Marcos’ top agenda item for the visit as he aimed to leverage the decades-old security ties to get a tariff discount.
Trump in his post emphasised that in addition to the trade deal, the two countries “will work together militarily”, while lauding Marcos as a “tough” negotiator.
The US trade deficit with the Philippines widened to US$4.9 billion in 2024, a 21.8 per cent jump from 2023.
On April 2, Trump threatened to impose a 17 per cent reciprocal tariff on Manila, but in a letter dated July 9, he stated the levy would increase to 20 per cent if no deal is reached by August 1.
A group of Philippine negotiators flew in last week before Marcos arrived in on Sunday.
Earlier in the day, Trump told reporters in the Oval Office that the two sides were “very close” to finishing a “big trade deal”. He added that he was “surprised” to see how much bilateral business both countries were doing, saying “they’re going to get bigger under what we’re doing and what we’re proposing”.
In a televised meeting, Trump told Marcos that it wouldn’t “bother” him “at all” if Manila maintained friendly ties with Beijing, while Marcos pointed to rising tensions in the South China Sea as the key reason for deepening defence cooperation with Washington.
“Don’t mind if he [Marcos] gets along with China, because we’re getting along with China very well,” Trump said. “He has to do what’s right for his country ... you’re dealing with China – wouldn’t bother me at all.”
However, Marcos said that there was “no need” for the Philippines to balance its ties between the US and China, saying he was “essentially concerned with the defence of our territory and the exercise of our sovereign rights.” He emphasised the need to work closely with allies, adding, “Our strongest partner has always been the United States.”
Marcos said the Philippines’ military modernisation efforts are a direct response to the “circumstances that surround the situation around the South China Sea.” He added that closer engagement with the US and other partners is “necessary” given the current regional security environment.
Manila has had a mutual defence treaty with the US since 1951, committing both nations to mutual support if either is attacked in the Pacific region.
The South China Sea is a growing flashpoint, with tensions between China and the Philippines, Vietnam, and Malaysia running high over competing claims.
Recent years have been marked by a series of dangerous encounters between Philippine and Chinese coastguards.
Under Marcos, who took office in 2022, the Philippines has expanded US access to its military facilities, ramped up joint exercises and increased rotational troop deployments.
Last week, the US embassy announced plans for the US Navy to build two repair and maintenance facilities for Philippine military vessels on Palawan – the closest island to Manila-held territory in the South China Sea.
In 2023, under the administration of former US President Joe Biden, Manila approved four new military bases to boost US-Philippine interoperability and enable a faster, joint response to common challenges in the Indo-Pacific region.
Nevertheless, Trump claimed that before he was re-elected, Manila was “tilting” toward Beijing but “they came right back to us” after he was re-elected.
“I think I can say that the last administration was not getting along with them too well,” Trump said, stressing, “we have some fantastic military relationships with the Philippines, and that’s been reinstituted.”
“The country was maybe tilting toward China, but we untilted it very, very quickly ... when I got elected, everything changed, and they came right back to us,” he said. - SOUTH CHINA MORNING POST
