By DIEGO MORRA
The Marcos Jr. administration is working overtime, which rarely happens in a regime infamous for indolence, to prettify its one-sided tariff deal with the US, with observers saying the attempt to make the lousy agreement a victory for the Philippines is akin to putting lipstick on a pig. A pig is still a pig even if you use perfume, lipstick and other adornments on it. There is no sense putting expensive perfume on a deal that stinks and benefits only Donald Trump, a clown who thinks that tariffs are paid by exporters.
However, the main enemy of the Marcos Jr. regime is arithmetic. The 19% tariff by the US on imports from the Philippine is not equivalent to the zero tariffs on American cars, wheat, soya, corn, pharmaceutical products and other farm commodities. It is a punishing tariff that will hit exports of microelectronics, electrical equipment and components assembled in the country using materials from other countries. This being the case, these products, particularly from Ayala-owned companies, will be slapped additional tariffs if they were sourced from China or other countries. Ayala’s exports to the US represent 2% of the conglomerate’s revenues but for San Miguel Corp. (SMC), its food exports to the highly-protected US market comprise less than 1% of its revenues.
The 19% will not be 19% by any stretch of imagination if Trump suddenly declares that the raw materials for Philippine exports came from China, even if such materials come from US-owned factories operating in China. In short, exports assembled only in the Philippines will be slapped additional tariffs, making them more expensive. Yet, you have cognitive dissonance all over the airwaves and a lot of storytelling a lie in the newspapers about the “mutual benefit” from the deal with a buffoon whose idea of negotiations is bamboozling his counterparts and threatening invasions on smaller nations. The US is not negotiating but coercing trading partners to accept its impositions. That is the context of his tariff love letters that are not even based on the balance of trade of the US with other nations. This explains why Trump imposed crippling tariffs on territories populated by penguins.
Ferdinand Marcos Jr. now has to explain whether he negotiated with Trump or was simply told to accept the tariff deal. To make it look that actual negotiations took place, Trump gave him a 1% discount. “Tumawad ngunit kulang.” In haggling, a buyer always seeks a 50% slash in the price, or the “turing,” and threatens to walk away if the price isn’t right. He needs more than the feverish defense of ex-Albay Rep. Joey Salceda, who said that Marcos Jr. gifted Trump with zero tariff on US cars to pander to the American audience. So, it is not national interest that matters but the tongue bath for Trump to make him look at his narcissistic best. Now, unemployed after losing in the midterm elections in Albay, Salceda makes himself relevant by claiming that zero tariffs for US-made capital equipment “will be beneficial” for Philippine manufacturers. Only that the US no longer manufactures capital goods, with its industries shunted off to China, Vietnam and other countries to take advantage of low labor costs and generous tax perks.
As in the Enhanced Defense Cooperation Agreement (EDCA), it is the Philippines that always accommodates the US, grants it extraterritoriality and basing rights and the country gets decommissioned vessels, ancient weapons and “ironclad guarantees” that US forces will be around to help kick out Chinese ships and maritime militia boats within Philippine territory. Like Godot, US forces never come. However, Malacanang is now trying to make the debacle at the Oval Office as an occasion to brag and claim that the unequal tariff deal will boost the country’s competitiveness, enhance its industry and agriculture and signal the dawn of progress. Those empty phrases should have been buried after the Parity Rights elapsed, but they are being resurrected, showing to one and all that puppetry is a virtue that catapults an aspirant to the Palace.
For Marcos Jr. and his economic genius, Secretary Frederick Go, the special assistant for investment and economic affairs, the deal with Trump was good. But private sector economists warn that the 19% tariff does not give the Philippines any competitive edge and without it foreign investments would not surge. One banker even questioned why Marcos Jr., Trump’s ally, failed to secure more favorable terms that others in ASEAN. With 19% tariffs on Philippine goods, investors would still bet on Vietnam and others since they target export markets. The Philippines is ranked 29th among exporters to the US. Seventeen percent of total Philippine exports are shipped to the US. Exports comprise 13% of the country’s gross national product (GNP)
Salceda thinks that the deal with Trump was heaven-sent as it covered security matters as well, with the Philippines and the US vowing to strengthen defense cooperation, with Washington claiming annually that it has been pampering the Philippine defense establishment and counting the salaries of its soldiers and officers on excursion to EDCA sites as “aid.” Surely, US operational expenses for its aircraft, ships, armored personnel carriers (APCs) will be tacked on to the $1-billion military “aid.” Then, there is the matter of the P1-billion project hatched by the Department of Transportation and the US Trade and Development Agency for the Subic-Clark-Manila-Batangas railway, which links ports, airports and logistics hubs to benefit US corporations. The suspected soothsayer in Salceda also waxes ecstatic over the possibility of a Free Trade Agreement (FTA) with the US and argues that the Beltway is seriously considering such an arrangement.
As to the ticklish of the masked ICE hooligans of Trump arresting and deporting Filipino seamen from cruise ships in the US, with at least 100 bundled into airliners for delivery to Manila, Salceda says the 1% tax on overseas Filipino workers (OFWs) “can be overcome administratively.” But what about the injustice committed against his compatriots? Zilch. Will branches of Philippine banks in the US be treated fairly and its personnel not be hounded by the ICE? The answer is that they should be accorded the same concessions as US banks. Can Salceda ever show us the complete tariff deal with the US? Not a chance. It appears that nothing of that sort has been carved in stone. In short, wala pang tunay at dalisay na kasunduan. Talk really is damn cheap with Trump.
