MANILA, Philippines — According to reports from Kuala Lumpur where the ASEAN Summit conference was held last week, the US granted a zero percent import tariff exemption to three Southeast Asian countries – Thailand, Malaysia and Cambodia – under new trade agreements approved directly by US President Donald Trump.
For Thailand, the US has retained a 19 percent tariff on many items; but several Thai products will now enjoy a zero percent rate.
There are other provisions. Thailand committed to purchase over $20 billion worth of agricultural products, energy supplies and 80 airplanes manufactured in the US. Bangkok agreed to lift tariffs on nearly 99 percent of US goods.
Malaysia secured zero percent tariffs for three major sectors: aerospace equipment; pharmaceutical products and key commodities such as palm oil, cocoa and rubber. Malaysia had agreed to invest $70 billion in the US.
For Cambodia, the US will maintain a 19 percent reciprocal tariff for imports except for “identified products from the list set out in Annex III to Executive Order 14346” which will receive a zero percent reciprocal tariff.
Prior to this agreement the rate for Cambodia had been at 49 percent (then later revised down to 36 percent for all goods as of Aug. 1) while negotiations were ongoing.
As for Vietnam, a joint statement (Oct. 26, 2025) between the US and Vietnam says: Vietnam will provide “preferential market access for substantially all US industrial and agricultural exports.”
The US will maintain a 20 percent reciprocal tariff on Vietnamese-origin goods. The US will also identify specific products – from a list set out in Executive Order 14346 Annex III that will receive a zero percent reciprocal tariff rate.
Indonesia is currently negotiating a similar deal.
As for the Philippines, the Palace said the government opted out of a trade agreement to protect key domestic sectors from being fully opened to foreign competition.
Frederick Go, Special Assistant to the President for Investment and Economic Affairs, said, “We are trying to protect several industries in the Philippines, such as rice, corn, sugar and poultry.”
Recall this report from the Philippine News Agency last July 24 about BBM’s White House visit:
“It was a beautiful visit, and we concluded our Trade Deal, whereby The Philippines is going OPEN MARKET with the United States and ZERO Tariffs. The Philippines will pay a 19 percent Tariff,” Trump posted on his Truth Social account.
But Philippine officials quickly denied Trump’s claim and clarified that not all goods imported from the US will be tariff-free. Some sensitive Philippine sectors (e.g., rice, sugar, corn, fisheries, pork, chicken) are excluded from those concessions.
That’s where we are, still stuck. The Philippine trade negotiating panel has achieved nothing since BBM’s visit to the White House back in July. In the meantime, our neighbors have been getting ahead in their trade talks with the US.
Our ASEAN neighbors are bold enough to open their borders to zero percent tariff even on agricultural products as the price to pay for favorable treatment in the large US market. We are content to be where we are now.
That’s not surprising. Protectionism has crippled our economy since 1946. We have never considered export as an engine of economic growth.
What little manufacturing we have had were focused on the domestic market, victimizing Filipino consumers with overpriced and substandard products. Filipino First protectionism stunted our economy.
Even today, we are not hospitable to manufacturing for export. Energy is expensive. Regulation is iffy, with corruption and red tape to scare any investor.
According to TheGlobalEconomy.com, as of 2023, exports as a percentage of our GDP is just 26.6 percent and that includes earnings of our BPO sector.
Compare that to our ASEAN neighbors: it is 86.5 percent for Vietnam; 181.6 percent for Singapore; 68.6 percent for Malaysia; 66.9 percent for Cambodia.
It is probably safe to say that no developing country like us can hope to economically develop and reduce poverty by simply depending on domestic consumption and ignoring exports. Vietnam is a good recent example of how it is done.
Earlier, South Korea pursued an export-oriented industrialization strategy from the 1960s through to the 1990s: building heavy and chemical industries, expanding manufacturing capacity, focusing on global markets and using exports to drive growth and build domestic capability.
The precarious political situation of BBM, who is also lackadaisical, explains his hesitance to take a leap away from protectionism.
Agriculture is a sore point because 20 percent of our workforce is still there, languishing in poverty and by our prevailing logic, requires protection.
The failure to modernize agriculture, especially rice and sugar, has made them inefficient and uncompetitive, unable to survive without government help, at the expense of food consumers.
In the end, the whole nation suffers from expensive food. We recently experienced high food inflation. Expensive food explains massive malnutrition/hunger. It also causes high labor costs that prevent our manufacturing sector from being competitive.
Allowing US corn imports in, for example, will bring down the cost of feed for poultry and livestock that will make the cost of food for every Filipino go down. Maybe that will also force corn farmers to be more competitive or shift into higher-value crops.
Opening up may also provide opportunities for trade diversifications and foreign investment. Strong trade relations with the US may bring investment, technology transfer and market access which can benefit broader economic growth.
In summary, opening to agricultural imports from the US can keep food prices in check, spur higher-value processing and linkages and boost growth.
But if the transition is mishandled, which our government likely will, local agriculture could shrink without replacement jobs emerging fast, leading to localized rural decline and higher inequality.
Our real problem is simple: every President we ever had, failed to modernize agriculture and the current one is afraid to even try.
Being left behind in Kuala Lumpur by our neighbors who signed trade agreements with Trump is another step backward in our country’s competitiveness. Kulelat nanaman.
Boo Chanco’s email address is [email protected]. Follow him on X @boochanco
