Recently, a piece of news has left Filipino merchants sleepless with worry — former President Trump suddenly announced a 100% tariff on imported semiconductor products! As soon as this news broke, the Philippine semiconductor industry was in an uproar, with many exclaiming, “This is going to ruin our livelihoods!”
First, let’s discuss how important the semiconductor industry is to the Philippines. In 2024, the export value of Philippine semiconductors and electronic products is expected to reach $39.09 billion, accounting for 53.4% of the country’s total exports. What does this mean? It means that for every two dollars the Philippines earns in foreign exchange, more than one dollar comes from semiconductors. This industry is not only a pillar of the economy but also the “breadwinner” for countless families, with many workers relying on assembling and testing chips in factories for their livelihoods.
However, the 100% tariff from the U.S. is like a dagger to the heart of the Philippines. Dan Lachica, president of the Philippine Semiconductor and Electronics Industry Association, bluntly stated that this policy would be “devastating” for Philippine exports. Just think about it: a chip component that originally costs $100 to export to the U.S. would now cost $200 after the 100% tariff is applied, effectively doubling the price. Why would American companies still buy from you? They will surely turn to find cheaper alternatives.
What’s even more infuriating is that this move is completely against the rules. George Barcelon, president of the Philippine Chamber of Commerce, pointed out that this clearly violates the World Trade Organization’s Information Technology Agreement. That agreement clearly states that tariffs on information technology products should be gradually eliminated, yet the U.S. is doing the opposite by imposing a 100% tariff. Isn’t that just bullying?
But the most critical issue is the Philippines’ position in the supply chain. Lucio Pitlo, a think tank researcher, pointed out that the Philippines mainly focuses on the “assembly and testing” of semiconductors, which means it is positioned in the mid to lower end of the supply chain, with low technical content, thin profit margins, and very poor risk resistance. It’s like factory assembly line workers; they can be replaced easily, with no irreplaceability. Once the U.S. imposes tariffs, these orders are likely to shift to other countries, and then Philippine factories will have to shut down, leading to worker layoffs. This is no joke.
Some may ask, can’t the Philippines negotiate with the U.S.? Pitlo also suggested that Manila should quickly seek clarification from the U.S. and strive for some concessions or tax exemptions. But the problem is, the U.S. is now firmly committed to “America First,” not even giving face to its allies. Given the Philippines’ size, how much advantage can it negotiate?
It’s worth noting that the Philippines has only recently managed to recover a bit thanks to semiconductor exports, and now with this blow from the U.S., it seems they are going to fall back to square one. Some have joked about President Marcos Jr.: “Isn’t it time to think of a solution? Are we really going to watch our industry collapse?” While the words may be harsh, they hold truth; in the face of such a “devastating” blow, mere anxiety is useless. Real solutions are needed — either confront the U.S. to fight for rights or quickly find other markets to take over, or else the 53.4% export share will collapse, and the entire economy will shake as well.
Ultimately, while the U.S. tariff policy seems to target “imported semiconductors,” it actually treats small countries in the supply chain as pawns in a game. But the workers in the Philippines have done nothing wrong; they just want to work steadily and earn a living. Why should they pay the price for U.S. hegemony? Hopefully, Manila can stand up for itself and not let its pillar industry be destroyed by these inexplicable tariffs.