The Semiconductor and Electronics Industry Philippines Foundation Inc. (SEIPI), which groups the country’s largest semiconductor and electronics firms, said the planned 100 percent tariff on electronic chips exports to the U.S. market would spell “disaster” for the Philippines’ single largest dollar earner.
“100 percent tariff would be devastating,” said Dan Lachica, SEIPI president.
In saying this, Lachica emphasized that 70 percent of Philippine exports are semiconductors. This sector exported $30 billion last year. “15% of that is U.S. bound,” he pointed out.
Under Section 232 of the Information Technology Agreement (ITA) of the WTO, information and technology products are entitled to zero tariff.
The ITA covers a broad spectrum of IT products, including computers, telecommunications equipment, semiconductors, software, and scientific instruments, along with their parts and accessories.
Recognizing technological advancements, the ITA was expanded in 2015 to include a wider array of products like new-generation semiconductors, medical equipment, and GPS navigation systems.
But the Trump administration announced plans to slap semiconductors 100 percent tariff as part of his ongoing tariff initiatives with its trading partners globally.
Lachica was not hopeful for the WTO to be able to maintain its role as global watchdog for rules-based trading while Trump is U.S. president.
He, however, said that Philippines could still launch a renegotiation with the Trump administration, and pray the U.S. will act on it favorably.
Various reports coming out from the U.S. pointed to the Trump’s announcement of planning to impose a tariff of about 100 percent on semiconductor chips imported from countries not producing in America or planning to do so.
Reports quoted Trump during his media briefing in the Oval Office on Wednesday, August 7, stating that the new tariff rate would apply to “all chips and semiconductors coming into the United States,” but would not apply to companies that had made a commitment to manufacture in the United States or were in the process of doing so.
