President Donald Trump’s decision to raise tariffs on selected Philippine exports to the United States—from 17 percent to 20 percent —has important implications for the country’s manufacturing sector and trade competitiveness. While electronics and agricultural products are unaffected, the new tariff rate applies to a broad swath of labor-intensive goods including leather items, furniture, toys, sports equipment, and textiles. These industries contribute significantly to employment and rural development, and serve as entry points for small and medium enterprises into global value chains.

Although the tariff hike is relatively modest, it comes at a time of tight margins, rising production costs, and intensifying competition from regional neighbors. Most notably, the Philippines has now been placed on parity with Vietnam, which earlier negotiated a similar 20 percent rate on its exports to the U.S. This development reflects how Washington is leveling its trade posture across Southeast Asia amid broader strategic recalibrations. It also highlights the urgency for the Philippines to secure more differentiated access in future trade talks.

Japan’s MUFG Bank has opined that the economic impact of the U.S. tariff hike on the Philippines will be minimal in the short term. The peso is expected to remain stable, and the macroeconomic fundamentals of the country remain intact. While reassuring, this should not lead to complacency.

As President Ferdinand R. Marcos Jr. prepares for bilateral talks with President Trump in Washington, D.C., it is crucial for the Philippine side to adopt a clear and strategic negotiating stance. While tariff adjustments will undoubtedly dominate the trade discussion, they should not be viewed in isolation. The Philippines brings significant value to the broader U.S. Indo-Pacific strategy—not least through its role in regional security and defense.

Under the Enhanced Defense Cooperation Agreement (EDCA), the U.S. maintains access to strategically located Philippine bases. Proposals to expand this through the establishment of ammunition hubs and prepositioning of defense equipment further deepen this alliance. Without appearing transactional, President Marcos may appropriately underscore that the Philippines is not merely a trading partner, but a linchpin in regional peace and security.

This point gains greater weight in the context of U.S. Senator Marco Rubio’s assertion that “the history of the 21st century will be written in the Indo-Pacific and Southeast Asia.” If the Philippines is to play a meaningful role in shaping that history, it must be treated as more than a passive participant in trade arrangements. We must be seen—and must act—as a reliable partner with both strategic and economic relevance.

President Marcos’ visit presents an opportunity to broaden the conversation: from tariffs to a comprehensive economic relationship. The Philippines should seek stronger trade facilitation, expanded market access, and new investments in manufacturing and digital infrastructure. These should be pursued not as concessions, but as components of a mutually beneficial alliance grounded in shared interests.

In navigating this complex terrain, the Philippines must speak with clarity, confidence, and purpose—leveraging both its economic potential and its strategic location. The goal is not just to minimize the pain of tariff hikes, but to elevate the entire relationship toward one of enduring partnership and reciprocal benefit.