Gov’t preparing for US-China trade war, Palace says

July 9, 2018

The Philippine government is preparing for the possible impact of the trade war between the United States and China, a Palace official said on Monday.

In a press briefing, Presidential Spokesperson Harry Roque said the Departments of Trade and Industry and of Finance are studying the effect of the trade war, which kicked in last Friday.

"Well, I know that both DTI and Department of Finance are studying the matter very thoroughly, identifying where we are vulnerable given the kind of export products that we have, assessing if some of our biggest exports to both the US and China will be affected," he said.

Roque acknowledged that the trade war between the two giant economies would somehow affect the Philippines.

"Take note that the tariff will be for goods originating from China and the United States.  Now, there are some products we export to China, which in turn are further re-exported to China. So in that sense, there will be some effect on us," he said.

"We are hoping of course that the trade regime under the WTO (World Trade Organization) will be made to prevail. Because all these tariff wars actually are subject to arbitration before the WTO dispute settlement procedure," Roque added.

Trade Secretary Ramon Lopez earlier said the US-China trade war would hit major countries involved because the tariffs are directed against each other, while products that were included in the tariff increases have little or no impact to the Philippines.

While there are opportunities for the Philippines in the trade war, such as the possible transfer here of manufacturing activities from affected countries, Lopez has expressed hope that the situation would not worsen as "nobody wins in a trade war."

A trade war erupted last Friday between US and China when the Trump administration imposed a 25 percent tariff on $34 billion of imports from China.

On the other hand, Beijing retaliated with duties on an equal amount of US products.

Both the US and China are major trading partners of the Philippines. Celerina Monte/DMS