17% US tariff harmful to agricultural sector – group

MANILA, Philippines, April 7 ------ Farmers are urging the government to implement proactive measures to prevent the United States’ forthcoming 17 percent tariff on Philippine goods from harming the local agricultural sector. In a statement, the Federation of Free Farmers (FFF) said the government must not be complacent over the reciprocal tariffs even if the Philippines will be slapped with the second lowest rate among US trade partners. The group argued that the higher tariff rate could still be detrimental to the country’s farm sector as this will result in higher cost of its agricultural exports. Agriculture Secretary Francisco Tiu Laurel Jr., however, downplayed the FFF warning. “Their analysis is wrong,” Tiu Laurel told The STAR. “It is a campaign period. They want to be relevant.” 

Tiu Laurel said the Department of Agriculture (DA) is still reviewing the impact of the Trump administration’s decision to slap a 17-percent tariff on Philippine exports to the United States. “Even if competing products become more expensive than ours, the fact remains that our products will still become 17 percent more expensive to the American consumer who can then decide to stop buying our products and shift to cheaper substitutes,” FFF board chairman Leonardo Montemayor said. 

Montemayor, a former agriculture secretary, argued that competing countries may provide additional support to their agricultural producers and exporters to offset the detrimental effect of US tariffs and maintain their advantage over the Philippines. “In our case, farmers and exporters are basically left to fend for themselves,” he said. 

The FFF also warned of a “potential” dumping of excess agricultural products by countries who were shut off from the US market due to the reciprocal tariffs. Worse, even US agriculture players who were affected by retaliatory tariffs may look for alternative markets and could end up selling their excess supply to the Philippines at “very low prices,” the group added. “In the end, it might be our own farmers who will bear the brunt of the Trump tariffs,” Montemayor said. 

The group identified the local coconut sector as one of the agricultural segments that may be immediately impacted by the US tariffs. The group said a slowdown in demand of coconut products, particularly coconut oil, from the US market can lead to a drop in domestic copra prices. The government should intensify its efforts to improve domestic agricultural productivity and improve cost competitiveness of farmers to ensure long-term growth for the sector, according to FFF. “If we do not do our homework and the US eventually withdraws these tariff hikes, we will be back to zero and lose out again to other countries,” Montemayor said. 

Samahang Industriya ng Agrikultura (SINAG) said the concrete impact of the higher US tariffs on the agriculture sector is yet to be seen but it is closely watching global market developments especially in countries that have already imposed retaliatory tariffs on the US as it may result in higher costs of farm inputs such as animal feeds and fertilizers. “But more than these developments, Trump’s action speaks volumes in protecting domestic markets by making imported goods more expensive, thus encouraging local purchases and development of local agriculture,” SINAG executive director Jayson Cainglet said. “Tariffs should not be used to kill competition but level the playing field. It is not true the tariffs should be zero outright,” he added. 

SINAG claimed that tariffs protect domestic industries, including jobs, providing them with the environment to grow further and eventually compete with other countries.“Let’s see… The statement (of Trump) is wide and each commodity has its own pros and cons. It was a sweeping statement. It doesn’t say much,” Tiu Laurel added. 

In Congress, House assistant majority leader and Tingog party-list Rep. Jude Acidre is confident that the Philippines is “not necessarily directly affected” by Trump’s retaliatory tariffs. “The OFWs are there. The direct foreign investments are here in our country. We don’t see anything because usually the effect goes to the exports. Even so, we do not see higher retaliatory tariff imposed on our exports in the Philippines,” Acidre said. “For me, we should use this to observe, study where the US is going. I think the most challenging thing about the situation, everything is on wait and see. Here lies the importance of economic resilience,” he added. 

Source: philstar.com