While the Philippine has nothing more left to offer to the U.S. in terms of trade leverage, it still holds one key asset: its longstanding relationship with America. It is now time for the Philippines to strongly remind the U.S. government of the critical strategic value the country plays for America – a value that has long been taken for granted by its strongest ally.
This was emphasized by Sergio Ortiz-Luis Jr., president of the Philippine Exporters Confederation, as President Ferdinand Marcos Jr. is set to travel to Washington, D.C. from July 20 to 22 for a bilateral meeting with President Donald Trump. In parallel, the Philippine negotiating team will return to Washington next week for another round of discussions regarding the increased tariff rate that the U.S. will impose on all Philippine exports starting August 1.
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Philippine Exporters Confederation
“We’ve been taken for granted, they should be reminded of the relationship and the critical value of the Philippines to them,” said Ortiz-Luis.
From the perspective of exporters, there is little left that the Philippines can offer to convince the U.S. to withdraw the reciprocal 20 percent tariff it has unilaterally imposed.
Ortiz-Luis pointed out that the Philippines has already extended significant geopolitical value to the U.S.—including military bases and a strategic defense position.
“There is nothing to leverage on in this game of geopolitics,” he said.
“Our negotiating team is at a disadvantage because we don’t have much to offer because of geopolitics, we don’t have a leverage anymore,” he added, noting that the U.S. would likely reduce Malaysia’s tariff to zero if it offered access to military bases.
Given these constraints, Ortiz-Luis said the best option for the Philippines is to continue diplomatic engagement with Washington.
“What the negotiating team can do is just to keep on talking with the U.S. because we have one advantage and that is our relationship that we’ve built over the years.”
“The Philippines should strongly remind the U.S. that it has nothing more to give because we were the first to give to this relationship and that should put us in a favorable light,” he emphasized.
Ortiz-Luis also cited U.S. government data showing that the U.S. had a trade deficit of USD4.9 billion with the Philippines in 2024, within a total bilateral trade volume of USD23.5 billion. This is significantly lower than the U.S. trade deficit with Thailand ($45.6 billion) and Vietnam ($123.5 billion). Vietnam, he added, secured a tariff reduction from 46 percent to 20 percent by allowing duty-free access to American goods.
Despite current challenges, Ortiz-Luis said the situation presents an opportunity for the Philippines to develop a more independent trade strategy and reduce its dependence on the U.S. market.
He reiterated the importance of government support in strengthening the country’s export sector through increased funding.
“Let’s take export development seriously. We don’t have budget for research and development, no funding for export development. Our neighbors spend for exports, but us—we do it by lip service,” he said.
