Philippines manufacturers seek exemptions from higher aluminium and steel tariffs

Overseas firms in Philippines, affected by the US-China trade war, are now seeking reprieve from higher US tariffs on imported aluminium and steel, according to Trade and Industry Secretary Ramon M. Lopez. These firms include Sunpower Inc., which produces solar panels for exports and other aluminium and steel products.

According to Lopez, Sunpower has already submitted a request for exemption. Being a major exporter of solar panels, the company fears that its exports are likely to be affected by the 30 per cent tariff on year one down to 15 per cent on year four. In imposing a higher tariff on this product, the US had invoked Section 201 of US Trade Act, which allows a country to enforce duties on products that could injure or threaten to injure the country’s domestic industries.

In response to the US’ decision to levy higher import tariffs on aluminium and steel, Lopez said Philippines’ aluminium and steel exports to the US fall below 3 per cent of the total US’ imports, thereby, too marginal to pose any kind of threat to the national security.

Lopez further noted that Philippines enjoys GSP privilege with the US until now, covering 3500 product lines that enter the US market at 0 per cent duty. Moreover, Philippines are currently enhancing trade arrangements with the US under the Trade and Investment Framework Agreement (TIFA), as a step toward a possible bilateral Free Trade Agreement (FTA).

So, expecting lesser impacts on Philippines, Lopez said he expects the trade war affected manufacturers to shift their production activities to the countries like Philippines.

Philippines, as part of ASEAN, also has an FTA with China and thus, has 90 per cent of product lines entering the respective markets at lower or zero duty.

Therefore, China is now showing interest in balancing its global trade surplus by unilaterally lowering its MFN tariffs on footwear, kitchenware, headgear, and apparel from 15.9 per cent to 7.1 per cent, cosmetics from 8.4 per cent to 2.9 per cent, washing machine and refrigerators from 20.5 percent to 8 percent, processed foods such as aquaculture and fishery products, mineral water from 15.2 percent to 6.9 percent, starting from July 1, 2018.