Amid looming US protectionism, Canada is clinging on to trade and will send its biggest-ever business mission to the Philippines in the first week of December.

Mary Ng, Canadian Minister of Export Promotion, International Trade and Economic Development, will lead the high-level Team Canada Trade Mission in Manila on Dec. 4 to 6, embassy officials told a press briefing on Thursday, Nov. 21.

Canadian Embassy senior trade commissioner Guy Boileau said it will be Ng's second time in the country after her September 2022 visit. This time, Ng will be joined by over 300 Canadian business leaders coming from more than 180 firms belonging to 20 industry groups across 17 sectors.

Boileau pointed out that up to three-fourths of Canada's gross domestic product (GDP) is linked to international trade, underscoring the importance of market diversification. "Overconcentration is not always a good thing," he explained.

Trade and investment liberalization reforms that allowed greater foreign participation in retail trade, public utilities as well as renewable energy (RE), among other sectors, towards the tail-end of the Duterte administration and by the current Marcos Jr. government, have sparked "much more" interest in the Philippines, especially among Canadian exporters and investors who are looking for a stable business environment, Boileau said.

He added that the growing Philippine economy, coupled with its English-speaking and highly-educated population, is seen as not only a lucrative market for Canadian products but also a regional hub among those expanding across Southeast Asia.

In fact, Boileau disclosed that "a few" Canadian retailers plan to set up shop here next year, although he declined to elaborate.

The bigger share of participants in the upcoming trade mission will include Canadian companies that would explore opportunities in the country for the first time, even as existing locators are also keen to expand their presence here, Boileau noted.

This forthcoming trade delegation will focus on four priority industries: agriculture and food security; clean technology, including green mining; infrastructure and smart cities, especially nuclear power; as well as information and communications technology (ICT), where fast-rising artificial intelligence (AI) has been big these days, he disclosed.

Players in the aerospace and defense plus education sectors will also take part in this Philippine trade mission, which would exceed the number of participants during recent Canadian business missions to Japan and South Korea, according to Boileau.

For the Philippine side, about 100 homegrown firms, including key Filipino conglomerates, will participate in business-matching sessions to land long-term strategic partnerships, he said.

On top of Manila-based companies, business chambers from the cities of Cebu and Davao as well as other parts of the country are likewise expected to join, he added.

"It's a platform to explore opportunities for both sides—not just about Canada, but about Canada and the Philippines," he pointed out.

Canada continues to promote bilateral trade and investments with the Philippines, even as its southern neighbor the US, under a Trump 2.0 presidency early next year, is expected to protect domestic industries from an influx of immigrants and imported goods.

Andrew Green, political and public affairs counsellor at the Embassy of Canada in the Philippines, pointed out that the diversification and expansion of Canadian export destinations have been going on since 2022, under Ottawa's own Indo-Pacific Strategy.

Green added that ongoing efforts to intensify Canadian-Philippine economic relations are disconnected from Donald J. Trump's recent US presidential election victory.

But Green conceded that with the US as Canada's top trading partner, diversifying export markets and sectors in the Indo-Pacific region certainly "will help Canada balance against any particular disruptions" in its trade relations with America.

As such, Boileau said Canada is working with the member-states of the Association of Southeast Asian Nations (ASEAN) to conclude negotiations for their free-trade agreement (FTA) by end-2025.

According to economic think tanks, countries targeted to be slapped with higher import duties by the US under President-elect Trump are expected to fight back.

"The experience of the first Trump administration suggests that other countries will retaliate to the imposition of new US tariffs but in a way that is measured and minimizes the risk of escalating tensions with Washington," Capital Economics group chief economist Neil Shearing and senior emerging markets economist Liam Peach said in a Nov. 20 report.

Capital Economics cited that while Trump's first White House stint in 2017 to 2021 delayed US tariff hikes to 2018, "over the subsequent three years tariffs were increased on both America's adversaries (notably China) but also its allies (including Japan, South Korea, Vietnam, Mexico, Canada and the EU)."

In turn, "every country with the exception of Japan retaliated to increases in US tariffs during the first Trump administration," the London-based think tank noted, adding that "retaliatory tariffs did not provoke any concessions from the US."

Canada and Mexico, which with the US formed part of the North American Free Trade Agreement (NAFTA), had turned to offering concessions during the trade deal's renegotiations, which helped them dodge the imposed preliminary tariffs, Capital Economics pointed out.

In the case of the Philippines, Capital Economics recalled that when Trump in 2018 threatened tariffs unless American exports are granted better market access, then-President Rodrigo R. Duterte returned a threat to end the Visiting Forces Agreement (VFA) with the US.

In the end, Trump's tariff threat against Philippine imports did not materialize, the think tank noted.

In a separate report also on Nov. 20, Capital Economics' Peach said that as a whole, "Trump's victory in the US election is seen almost universally as negative for emerging markets, both directly through the impact of higher US import tariffs on emerging markets' exports and indirectly through the impact of higher US inflation on Fed policy, Treasury yields and the dollar."

"For most emerging markets a 10-percent tariff will reduce GDP by 0.2 to 0.4 percent... We think emerging-market currencies will weaken against the dollar next year, by five percent on average. The hit to GDP in China and Mexico—and the extent of their currency falls—will be larger," Peach warned.

Based on estimates of the Singapore-based DBS Bank Ltd., US imports from the Philippines last year amounted to $13.7 billion, making it America's 32nd-largest import source.

For the part of UK-based think tank Oxford Economics, its global macro research director Ben May in another report slightly trimmed its global growth forecast for 2026 to 2.9 percent from three percent previously, following a review of Trump 2.0's impact on world trade, investments as well as interest rates.

"A key shift is that we now assume that Japan, South Korea, and Vietnam will also face US tariff hikes -- and the net wider could be cast wider still. We also assume larger US tariffs on China and greater retaliation. We have also reduced our forecasts for world trade growth to reflect a less-conducive global trade environment," Oxford Economics explained.

"With respect to timing, based on historical experience, we think it's likely to take almost a year from the announcement for higher tariffs to be put in place. Our baseline thus assumes that any tariff hikes are likely to occur in late 2025 or early 2026," the think tank said.

Oxford Economics believes that Trump would unlikely slap blanket and "extreme" tariffs, which are feared to push the US economy into a recession.

"In our view, the main objectives of tariffs are to undermine China, protect parts of the US manufacturing base, and to gain a bargaining chip to win concessions on other issues. These objectives are better achieved via targeted tariff increases on specific economies and sectors," it noted.

"The economies most at risk from new US tariffs are likely to be those that export considerably more goods to the US than they import, especially if they also impose higher tariffs than the US does," which, based on Oxford Economics' updated and expanded forecast, include Canada, China, the European Union (EU), Japan, Mexico, South Korea and Vietnam.

"Of course Trump could take a harder line and impose tariffs on more economies with which it runs a bilateral goods deficit. India, Malaysia, Thailand, and Switzerland are all prime candidates to be next in line given the size of their trade surpluses with the US," the think tank warned.

The Philippines' two-way trade with the US exceeded $22-billion worth in 2023, with more Philippine exports than its imports.

While the US is the Philippines' top export destination, China is our No. 1 source of imported products.

"The extent to which the new government's policies will align with the more extreme campaign rhetoric may become clearer in the next few weeks. But even if key government appointees strike a more moderate tone, a Trump presidency means a much more uncertain world," Oxford Economics lamented.