By Beatriz Marie D. Cruz, Reporter
MADRID — Asian countries exporting to the US must bolster intra-regional trade to mitigate any disruptions caused by US tariffs, an academic said.
“Maybe for some very export-oriented Asian economies, this is a wake-up call. They need to say, ‘We need to find, diversify, and try to see if we can trade with each other,’” Waya Quiviger, Professor of Practice of Global Governance and Development at IE University in Madrid, told BusinessWorld.
“But if we’re selling the same things, we can’t trade with each other… So, diversify your economy… Maybe try to (develop) the domestic market, which is very hard to do,” Ms. Quiviger said.
US President Donald J. Trump in April imposed reciprocal tariffs on most of the world, but paused the scheme for 90 days pending negotiations. In the interim, he charged a 10% tariff on most trading partners.
The Philippines was assigned a 17% reciprocal tariff in April, one of the lowest in Southeast Asia.
The US remains the top destination for Philippine-made goods, with exports hitting $4.26 billion in the first four months of 2025. Its top export products to the US are semiconductors, electronic integrated circuits, insulated wire, and other insulated electric conductors.
“Trump is extremely unpredictable,” Ms. Quiviger said. “What he’s been saying since April has varied, and what we see is a lot of volatility in what he’s saying, and these threats of increasing tariffs.”
The 90-day pause is set to end on July 9, by which time new rates may have been negotiated with many trading partners.
Higher US tariffs on China, the Philippines’ largest trading partner, could further widen the latter’s trade deficit, Ms. Quiviger also said.
The US and China last week agreed on a 55% tariff rate on all Chinese goods.
“(China is) probably gonna price its exports even lower since they’re not selling to America,” Ms. Quiviger said. “It’s up to the Philippine economy to try to say, ‘We need to diversify,’ and it’s maybe hard to do, especially with such a giant next to you.”
The Philippines’ balance of trade in goods has been in a deficit since 2015, with a trade gap of $15.91 billion as of April, the Philippine Statistics Authority reported. China accounted 29.4% of all imports in April.
To stay resilient, Ms. Quiviger said Asian economies should leverage domestic production based on demand.
“You have to try to foment domestic consumption, domestic sectors… So, try to produce goods where there’s demand,” she noted.
“What is it that the local economy demands? Are you producing it already?” Ms. Quiviger asked. “If you’re not producing and there’s a big demand for it, then you have to find a way to produce it quickly, which is not easy to do.”