PHILIPPINE PRESIDENT Ferdinand R. Marcos, Jr. might need to persuade US President-elect Donald J. Trump about the wisdom of continuing to deepen trade ties between the two nations amid the threat of higher US tariffs, according to analysts.
“President Marcos, who seems to have a good relationship with President Trump, will want to develop a clear narrative about how trade with the Philippines benefits the US,” Raymond M. Powell, a fellow at Stanford University’s Gordian Knot Center for National Security Innovation, said in an X message. “Donald Trump is known to listen to compelling arguments from friends he trusts.”
He noted that Mr. Trump was elected in part due to dissatisfaction with recent inflation trends, “so some of his advisors will likely counsel caution in making tariffs so broad-based that they drive up prices for average US consumers.”
Mr. Trump broached the idea of a “free and open” Indo-Pacific region when he first became president in 2017 at the Asia-Pacific Economic Forum in Manila.
His successor, Joseph R. Biden, also supported the concept, launching the Indo-Pacific Economic Framework for Prosperity in 2022 with Australia, Brunei, Fiji, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam.
“I am cautiously optimistic that the Trump administration policy toward the Philippines on both security and economics will be consistent with the Biden administration’s,” said Gregory B. Poling, a fellow of the Southeast Asia program at the Center for Strategic and International Studies.
He noted that the first Trump government deepened the alliance and US commitment to a free South China Sea, and that a number of Republican members of Congress close to Mr. Trump had helped push major funding commitments to the Philippines in 2024.
“Trump’s pledge to impose universal tariffs on other countries will of course raise costs for US imports from the Philippines, but if those tariffs are imposed on every country, then it won’t harm the Philippines’ competitive advantage,” he added.
Mr. Poling said the US would likely remain committed to key priorities of a proposed Luzon Economic Corridor that include developing the Subic Freeport zone in Zambales province north of the Philippine capital. He added that it was the Trump government that had helped rescue the Hanjin Shipyard at the former site of a US military base when it went bankrupt.
The shipyard, owned by Hanjin Heavy Industries and Construction Philippines, was acquired by US private equity firm Cerberus Capital Management for $300 million in March 2022 after exclusive talks launched by a consortium of US and Australian companies in 2019 amid China’s interest in the shipyard.
“President-elect Trump is also clearly interested in reducing US vulnerability to Chinese market manipulations that he considers cheating,” Mr. Powell said.
“President Marcos will want to develop recommendations on how the Philippines, as a staunch friend of America, is a place that can help replace China as a trustworthy source of materials and components that can help reinvigorate the US manufacturing sector,” he added.
‘NOT JUST A TAKER’The stability of the South China Sea and the wider Indo-Pacific region amid China’s growing assertiveness at sea has been a cornerstone of Philippine-US relations.
Washington, which has a Mutual Defense Treaty with Manila, has always condemned the Chinese Coast Guard’s frequent use of water cannons to block Philippine resupply missions to Second Thomas Shoal where it has a handful of soldiers, and to Filipino fishermen near Scarborough Shoal.
Mr. Marcos, speaking before the Australian Parliament earlier in 2024, said his country was on the frontline of a battle for regional peace.
“Of course, President Marcos can also explain how the Philippines stands alone among the Southeast Asian nations in resisting China’s aggression in the region, and is therefore not just a ‘taker,’ but is actually a bold and determined ally in holding back Beijing’s plan to push the US out of Asia,” Mr. Powell said.
The Philippines under Mr. Marcos has pursued closer economic and defense ties with the US amid growing tensions with China.
The return to power of Mr. Trump, who has announced protectionist policies including higher tariffs after his presidential win, has raised questions for America’s Indo-Pacific allies including the Philippines, which has been a major beneficiary of Washington’s pivot to the region.
During the campaign, the populist leader said he wanted to impose 60% or higher tariffs on all Chinese goods and a 10% universal tariff.
The White House under Mr. Biden announced key economic projects for its former colony, including a commitment from its Department of Commerce and private sector to double the number of Philippine semiconductor plants as part of efforts to diversify American supply chains.
After a trilateral meeting among Mr. Marcos, Mr. Biden and former Japanese Prime Minister Fumio Kishida, the US bared a plan to put up an economic corridor on the main Philippine island of Luzon.
The so-called Luzon Economic Corridor seeks to boost connectivity between the capital Manila, Batangas province and Subic, Zambales and Clark, Pampanga — the site of two former US military bases.
The economic corridor, which is under the Indo-Pacific Economic Framework for Prosperity, also aims for other “high-impact” infrastructure projects such as ports and strategic investments in semiconductors, clean energy and supply chains.
Frederick D. Go, Mr. Marcos’ investment and economic adviser, in November said the Asian Development Bank was finalizing the terms of the project’s feasibility study. “It’s all systems go. Right now, it’s for the Subic-Clark-Manila-Batangas Rail,” he said.
He added that trilateral partners that include the US and Japan had promised to pursue the Luzon Economic Corridor even under Mr. Trump. Other countries want to join the corridor, and the Philippines was in talks to make it “more inclusive to the other countries.”
‘STABLE AND GROWING’Manila was set to submit proposed trade agreements to the US, Mr. Go said. “We certainly want to bring forward to the new Trump administration our various requests,” he said. “We have of course a few trade agreement requests that the Philippines would like to push that will enhance trade between the Philippines and the US.”
The US is the biggest destination of Philippine-made goods in November, with exports valued at $969.09 million or 17% of the total export sales. It was followed by Japan with $916.12 million (16.1% share) and China with $786.35 million (13.8%).
“US investments in the Philippines continue to be stable and growing,” Tereso O. Panga, director-general at the Philippine Economic Zone Authority (PEZA), said in a Viber message. “At the onset of the current administration, the Philippines made sure to renew and reinvigorate ties with the US.”
The early years of ex-President Rodrigo R. Duterte were marked by his anti-American rhetoric as he started a pivot to China away from the Philippines’ traditional western allies in 2016.
The tough-talking leader threatened on several occasions to terminate a US-Philippines visiting forces agreement as he accused Washington of failing to deliver on its military aid commitments.
Mr. Panga said the Marcos government is “consistently engaging” with the US International Trade Administration, an agency under the US Department of Commerce, to “further the presence of US businesses in the Philippines.”
He said many PEZA-registered US companies are long-term investors and are continually expanding in the Philippines. “A second Trump administration will continue with their policy as part of their thrust in ally-shoring.”
There are more than 300 US companies in the Philippines, 247 of which are in the information technology and business process outsourcing sectors and 70 in manufacturing, Mr. Panga said.
“PEZA remains the home of premier US locators and foresees this to continue onwards under President-elect Donald Trump.”
In his congratulatory message for Mr. Trump, Mr. Marcos cited “unshakable” Philippine-US ties that have been “tested in war and peace.”
“It is clear from his past actions and statements that Donald Trump favors protectionist tariffs as a key element in his program to restore the American industry and reduce trade imbalances,” Mr. Powell said. “There will be discussion about the imposition of tariffs on US trading partners, especially those which, like the Philippines, have a trade surplus with America.” — Kyle Aristophere T. Atienza
