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The United States is imposing a new 12.5-percent tariff on exports from the Philippines for failing to adopt measures against goods produced with forced labor, the United States Trade Representative (USTR) announced on Friday, July 24.
Correspondingly, exports from 59 other trading partners of the US were also slapped with tariffs ranging from 10 to 12.5 percent for the same infraction.
The United Nations (UN)’s International Labor Organization (ILO) defines’ forced labor’ as “all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself [or herself] voluntarily.”
Based on the latest statistics from the ILO, about 27.6 million people were in forced labor worldwide on any given day since 2021.
US trade representative Jamieson Greer cited that Washington has had a forced labor import ban for nearly a century and this has been rigorously enforced so “it’s well past time for (. . .) trading partners to do the same.”
Accordingly, the newly imposed tariffs will take effect just as temporary 10-percent worldwide tariffs expired at in the morning, also on Friday.
US president Donald Trump argued that high tariffs will revive American manufacturing as it overturns decades of US policy that favored lower tariffs and ever-freer trade.
Trump invoked the 1977 International Emergency Economic Powers Act (IEEPA) to impose double-digit tariffs on imports from almost every country across the globe even as he underscored that America’s long-standing trade deficit amounted to a national emergency.
However, some products, that include oil and gas and fertilizer, are exempted from the new tariffs. Also being spared are products that qualify for duty-free status under the US-Mexico-Canada Agreement, the North American trade pact Trump negotiated in his first term.
Meanwhile, industry groups in the Philippines have expressed concern over the additional tariff.
Management Association of the Philippines (MAP) president Donald Lim enthused that any increase in trade barriers affects the competitiveness of Philippine exports and the jobs they support.
Lim urged the Marcos Jr. administration to engage with US authorities to address any concerns, clarify issues raised and maintain the strong trade relationship between Manila and Washington.
Despite the new tarrifs, though, MAP’s top executive cited that it could also boost the Philippines’ determination to enhance supply chain transparency, maintain internationally recognized labor standards and expedite reforms that boost the competitiveness of Philippine exports.
On the other hand, Philippine Exporters Confederation Inc. (Philexport) president Dr. Sergio Ortiz-Luis noted that the additional tariff would undermine the competitiveness of Philippine exporters, particularly micro, small and medium enterprises (MSMEs).
“While we support initiatives to eliminate forced labor and promote responsible business practices, broad-based tariffs are not the most appropriate mechanism to achieve these objectives. Imposing blanket tariffs on an entire country’s exports, regardless of the actual risk profile of individual products or companies, may unfairly penalize legitimate exporters that have consistently complied with international labor standards,” Ortiz-Luis pointed out.