Trump announces trade deal with Philippines and terms of agreement with Indonesia

Both agreements impose a 19% tariff on goods imported by the United States from these countries, which will be paid by American companies, while American goods shipped to the Philippines and Indonesia will not be subject to tariffs.

US President Donald Trump announced that he and Philippine President Ferdinand Marcos Jr. had reached a trade agreement. Shortly after, the American leader also released more detailed terms of the agreement with Indonesia.

Both agreements impose a 19% tariff on goods imported by the United States from these countries, which will be paid by American companies, while American goods shipped to the Philippines and Indonesia will not be subject to tariffs.

The announcement of the agreement with the Philippines came after Trump met with Marcos at the White House. According to Trump, “it was a great visit.” At the same time, it is not clear whether the parties have signed official documents. Details have not yet been released.

Marcos is the first Southeast Asian leader to meet with Trump during his second term. The deal is the fifth in three months as the countries try to agree on tariff cuts by August 1. Details of the previously announced deal with Vietnam have not yet been released.

In April, the Trump administration promised dozens of new trade deals after suspending “reciprocal” tariffs. But the U.S. rhetoric has since shifted, with Trump now focusing on quality rather than quantity.

On Tuesday, Trump told reporters in the Oval Office that he was not yet ready to make a deal with Marcos because “he’s negotiating too hard,” but that “they’ll probably come to an agreement.”

The 19 percent tariff is unusually higher than Trump’s deals with other countries. In April, Philippine goods were subject to a 17% “reciprocal” tariff, which Trump later suspended. Earlier this month, he threatened to impose a 20% tariff starting August 1.

In 2023, the United States imported $14 billion worth of goods from the Philippines. Most of these were computers, electronics, food, machinery and clothing. American exports to the Philippines amounted to $9 billion, mainly electronics and food.

Ahead of the bilateral meeting, Philippine Finance Minister Ralph Recto said that the country was ready to zero tariffs on some American goods to persuade Trump to reduce the US “reciprocal” tariff. He did not specify which products this could apply to, but said that Manila was interested in a free trade agreement with the United States.

“The Philippines is opening its market to the United States — zero tariffs. The Philippines will pay a 19% tariff. In addition, we will cooperate in the military sector,” Trump wrote on Truth Social.

Later, according to Philippine media, Marcos said that his country may eliminate tariffs on American cars, but without specific deadlines.

Last week, Trump announced a similar agreement with Indonesia, which provided for a 19% tariff. On Tuesday, a joint statement from the United States and Indonesia was released with details.

The United States and Indonesia agreed to eliminate non-tariff barriers: a tax on digital services (advertising on streaming and social networks) and requirements for pre-export inspection of American goods. These requirements have particularly complicated the export of agricultural products.

Indonesia also agreed to recognize US car safety standards and eliminate restrictions on the export of critical minerals.

In April, goods from Indonesia were temporarily subject to a 32% tariff before Trump suspended it. Since then, the country has paid a minimum tariff of 10%, which is set to end on August 1.

Indonesia is the United States’ 23rd largest trading partner. In 2023, the United States imported $28 billion in goods from Indonesia (mostly clothing and footwear) and exported $10 billion (including seeds, grains, oil and gas).

Tags: Philippines, Indonesia, USA