Trump lessons for rice tariffs

The Philippines has struggled with balancing food security and agricultural competitiveness, particularly in the rice sector. In the past, the Philippines was known as an innovator in rice production; now, we are the world’s top rice importer. We may be considered the top consumer of rice, and it is bothersome that the price of rice has not lowered to what was promised by President Bongbong Marcos Jr., during his campaign in 2022.

In June 2024, President Marcos, Jr. signed Executive Order (EO) 62 to lower rice tariffs from 35 percent to 15 percent, which has sparked debates about its implications for local farmers and the broader agricultural industry. By examining the ongoing tariff policies of US President Donald Trump — particularly those imposed on Canada and Mexico — the Philippines can derive valuable lessons on how to use tariffs strategically to bolster its local rice industry rather than primarily benefiting rice importers.

In broad strokes early in his second term, President Trump controversially implemented high tariffs on Canadian and Mexican goods, aiming to protect American industries and reduce trade imbalances. While controversial, they underscored the potential of tariffs as tools for economic policy, fostering industrial growth while protecting domestic producers.

In contrast, the Philippines’ recent move to lower rice tariffs appears to favor importers rather than local farmers. Without adequate protection and support, Filipino rice farmers may struggle to compete, leading to reduced investment in local agriculture and an increased dependence on imported rice.

Agriculture Secretary Francisco Tiu Laurel previously mentioned the possibility of having a “hybrid tariff” system, specific to the type of rice being imported. This must be welcomed since, if the government wants to strengthen our rice industry, it may consider a tariff system that balances the interests of farmers and consumers. Instead of lowering tariffs across the board, the government may explore adjustable tariff schemes that protect local producers while ensuring affordability for Filipino consumers.

Further, the Philippines must ensure that revenue generated from rice tariffs is reinvested into modernizing rice farming — through improved irrigation, research and development, and subsidies for small-scale farmers. This will reduce production costs and enhance competitiveness, making Filipino rice more resilient against imports.

Nearly one year since the promulgation of EO 62, we have yet to see if this has long-term positive impacts on the rice industry. There must be clear oversight to determine if prices are lowering. If not, then the importers are the only ones benefiting from their increased profits.

The ongoing tariffs imposed by the Trump administration on Canada and Mexico may offer lessons for the Philippines. By viewing tariffs as a policy tool rather than a mere pricing mechanism, the Philippines can design a rice tariff strategy that protects and strengthens its local agricultural sector.

Rather than benefiting only importers, rice tariffs should be used to fund agricultural improvements, promote domestic competitiveness, and ensure long-term food security. In doing so, the Philippines can achieve a balance between affordability and sustainability, securing a better future for its rice farmers and consumers alike.

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