With just days remaining before steep reciprocal tariffs take effect, the U.S. and the Philippines have reached a tentative trade agreement that lowers duties on Philippine imports and grants zero-tariff access to American goods. The announcement adds momentum to a wave of last-minute deals ahead of the August 1 trade deadline.
Terms Finalized Amid Growing Tariff Pressure
President Donald Trump and President Ferdinand Marcos Jr. announced Tuesday that they had concluded a new trade agreement, lowering the planned U.S. tariff on Philippine imports from 20% to 19%. In return, the Philippines committed to eliminate tariffs on U.S. goods, including automobiles, agriculture, and pharmaceuticals.
The deal, shared by Trump on Truth Social and reiterated in a White House meeting with Marcos, offers full market access to American exporters and brings down the tariff rate just days before the U.S. was set to implement a higher 20% duty on goods from the Philippines.
“It’s a very big number and it’s going to get bigger,” Trump said, noting the scope of bilateral trade. While the agreement has yet to be formally signed or documented, Marcos said in a media briefing that the 1% tariff reduction represents a meaningful concession, especially for exporters dealing in high-volume categories.
The Philippines is one of several countries that have moved swiftly to renegotiate trade terms in response to the Trump administration’s August 1 deadline. In April, reciprocal tariffs were paused amid growing backlash from U.S. importers, but trade officials warned that rates as high as 50% could take effect unless new bilateral terms were reached.
More Deals Follow as Deadline Nears
The agreement with the Philippines comes amid a flurry of trade activity. On Tuesday, the White House also revealed terms of a deal with Indonesia, which mirrors the Philippines’ arrangement: a 19% tariff on goods entering the U.S. and zero tariffs on American exports.
The Indonesia deal includes significant concessions on non-tariff barriers, such as eliminating digital services taxes, removing pre-shipment inspection requirements that burden U.S. agricultural exports, and accepting U.S. motor vehicle safety standards.
Indonesia, the 23rd largest U.S. trading partner, had briefly faced a 32% tariff in April before a reprieve was granted. The country exported $28 billion in goods to the U.S. in 2024, led by apparel and footwear. In return, the U.S. exported $10 billion in oilseeds, energy products, and agricultural commodities.
Meanwhile, Manila’s trade officials continue to push for a broader free trade agreement with the U.S. Finance Secretary Ralph Recto noted earlier this week that the Philippines may allow further tariff reductions on specific American goods to deepen bilateral integration.
Watch the Baseline, Not Just the Concession
What matters in these deals isn’t only the final tariff rate, but the benchmark against which it’s measured. The Philippines’ 19% tariff, while technically a reduction, is still significantly higher than rates under historical trade preference programs such as the Generalized System of Preferences, which lapsed in 2020. Similarly, zero-tariff pledges for U.S. goods lack enforceable frameworks if not formally codified. As more nations scramble to secure market access before August 1, the deeper signal may be a global shift away from multilateral norms toward bilateral negotiations, where leverage, not parity, sets the baseline.