By Justine Irish D. Tabile, Reporter
THE Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) said the proposed 100% tariff on semiconductors entering the US market would be “devastating” to Philippine exporters.
“The 100% tariff would be devastating,” SEIPI President Danilo C. Lachica said via Viber.
US President Donald J. Trump announced plans to impose tariffs on semiconductors shipped to the US, but offered to exempt companies manufacturing in the US or those that commit to do so, Reuters reported.
Mr. Trump’s broader reciprocal tariffs on major trading partners were set to take effect starting Aug. 7.
In the updated annex, five members of the Association of Southeast Asian Nations (ASEAN), including the Philippines, will be charged 19%. The other countries are Cambodia, Malaysia, Thailand, and Indonesia.
Even prior to the announcement of a 100% tariff on semiconductors, SEIPI had expected the US tariff to temper the industry’s export projections.
“70% of Philippine exports are semiconductors, or about $30 billion last year, and 15%, or about $6 billion, of semiconductor exports are US-bound,” Mr. Lachica said.
Meanwhile, Electronics Industry Association of the Philippines President Earl Lawrence S. Qua noted that “most of the larger semiconductor packaging houses already have operations in the US.”
“These are the multinationals that have a multi-region footprint, which include the US. So I’m not sure how the tariffs will affect them; they could be insulated like Apple,” he said.
“Having said that, it will force locally owned players to think about expanding or at least investing in the US. But it could be very damaging in the short term,” he added.
Economy Secretary Arsenio M. Balisacan said that he does not expect the semiconductor tariffs to have an “adverse” impact, as the value added of semiconductors and electronics is not that high compared to other manufacturing exports.
“The second consideration is that while our electronics and semiconductor exports are hit by such changes in tariffs, a big chunk, a lot of our exports go to other countries. Maybe 80-90% of that goes to countries like China,” he said.