Malacañang on Monday said the Philippines is bracing for the possible impact of a full-blown US-China trade war, which started last Friday.
Presidential Spokesman Harry L. Roque Jr. said that the government, through Department of Trade and Industry (DTI) and Department of Finance (DOF), is studying the conflict “very thoroughly,” particularly the identification of vulnerable areas, notably the country’s exports.
Roque said the government is also assessing if some of the country’s biggest exports to both the US and China would be affected.
“Take note that the tariff will be for goods originating from China and the United States. Now, there are some products we export to China, which in turn are further reexported [elsewhere],” he said.
“So in that sense, there will be some effect on us. But we are of course studying and preparing for eventualities and we are hoping of course that the trade regime under the WTO [World Trade Organization] will be made to prevail. Because all these tariff war actually is subject to arbitration before the WTO dispute settlement procedure,” Roque said.
The Palace issued the statement after the DTI said that a prolonged trade war can slow down global economies and eventually affect even small players like the Philippines.
But Trade Secretary Ramon M. Lopez also said the products that were included in the tariff increases have little or no impact to the country, particularly washing machines, solar panels, steel and aluminum.
Because there is no major impact on the Philippines, Lopez also said, the country may stand to benefit if other affected manufacturers in countries affected will shift their production base to the Philippines to avoid facing higher tariff rates.
On Friday US imposed a 25-percent tariff on $34 billion of imports from China, while the Asian superpower imposed $34 billion in retaliatory tariffs on American soybeans, cars and other products.