What’s Not Being Announced: Ten Key Undercurrents in the Trump–PBBM Tariff Talks
July 22nd, 2025
Joey Sarte Salceda
Chair, Institute for Risk and Strategic Studies. Inc. (Salceda Research)
The details of the Trump-PBBM trade agreement are being ironed out, and PBBM, out of an abundance of courtesy and diplomatic finesse, is right not to directly correct President Trump’s sweeping initial announcement.
Having had conversations with the people working on the details, this is what I am certain of (and is not yet being announced by either government in public):
- There will be further rounds of talks for key exemptions to the broad “19 percent tariff” imposed. The aim is to get even lower tariff rates for Philippine goods. Principal targets are textile and electronics exports of the Philippines.
- “Zero-tariffs” for the US may not be as sweeping as Trump makes it appear. The US wants zero tariffs on cars, since the Japanese, the Chinese, and in some cases, even the Vietnamese are pricing them out of competition. Out of diplomatic poise, it is right that President Marcos let Trump have his moment for his own domestic audience, and we work on the details later.
- Zero-tariffs on US-made capital equipment will be beneficial for our manufacturing. The semiconductor industry in the country could certainly benefit from zero tariffs on US-made photolithography machines, wafer etching tools, ion implanters, and inspection systems. Zero-tariffs on these low-revenue but high-return imports will be mutually beneficial for our economies.
- The strategic partnership in security matters between the Philippines and the US has been reaffirmed. Note that even when aid to Ukraine and deployment in countries like South Korea have been paused or questioned or significantly reduced due to “cost considerations” and “fairness,” the Philippine-US defense cooperation agreement has been kept intact and is in fact being considered for expansion, which is very likely.
- We are getting non-tariff deals, such as the financing for key projects, such as the partnership between the U.S. Trade and Development Agency (USTDA) and the Philippines’ Department of Transportation (DOTr), for technical assistance for the construction of the Subic-Clark-Manila-Batangas (SCMB) Railway. There are more to come.
- A PH-US FTA is becoming increasingly possible. Being a net exporter to the US, we stand to benefit from such a deal. Thanks to the cordial discussion between PBBM and Trump, this is being seriously discussed in policy circles in Washington DC, especially among Republican aides.
- The 1% tax on OFW remittances that Trump’s Big Beautiful Bill will impose in 2026 can be administratively overcome, and that is also under discussion. The US could issue a rule or bilateral agreement recognizing Philippine banks in the US, such as BDO, Metrobank, and PNB U.S. branches, as regulated U.S. financial institutions under the exemption clause.
- There’s still plenty of leverage for the Philippines, including non-tariff barriers on US beef, wheat, corn, and other agricultural products. Trump did not say anything about perceiving our NTBs as “unfair.” Watch this space, especially as we modernize our own biosafety rules.
- The US has reaffirmed support for our policy position in the West Philippine Sea. That is leverage for future PH requests for defense modernization assistance. Note that Trump was the first US president to clearly support the Philippine position on this issue.
- Discussions continue on intergovernmental partnership in humanitarian assistance and disaster response (HADR). There is an ongoing partnership between the US and the Philippine OCD on disaster preparedness and response. US forces will support Habagat relief missions as affirmed today. The resumption of the US grants to OCD for disaster preparedness is under discussion.
Trump always plays to his domestic audience. Plenty of deals can be made with that knowledge.
