Local chip manufacturers were stunned by the pronouncement of US President Donald Trump yesterday of a 100 percent tariff on imported semiconductors in a renewed bid to arm-twist investments to the US.
“We’ll be putting a tariff of approximately 100 percent on chips and semiconductors, but if you’re building in the United States of America, there’s no charge, even though you’re building and you’re not producing yet,” Trump said.
Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI) president Danilo Lachica said the move will be a catastrophe for all players in the semiconductor industry.
“100 percent tariff (imposition) would be devastating, as 70 percent of Philippine exports are semiconductors. It was $30 billion last year, 17.3 percent of that was US sales,” Lachica told reporters in a Viber message.
According to the Philippine Statistics Authority, the country’s total chip receipts in June 2025 amounted to $7.02 billion, and the commodity has the highest annual increment in value of $897.38 million.
Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio Balisacan, however, said the backlash on the economy would be minimal.
“If they raise that to 100 percent, of course, we’ll be affected. But insofar as the effects on the economy, I don’t expect that to be adverse because, for one, the value added of semiconductors and electronics is not as high compared to the value-added of other exports,” he said.
“In terms of its impact on the economy, it’s big in absolute amount. But in terms of the net amount that thing can bring to the Philippine economy, it is not that high.”
Balisacan also noted that the Philippines exports to other countries, not just the US.
Thus, he is pushing for market diversification.
PCCI sees tariff cut
The head of the Philippine Chamber of Commerce and Industry (PCCI), meanwhile, believes that the Trump reciprocal tariff imposed by the US government on the Philippines could slide further, and 7 August will not be the final date for its implementation.
“In my evaluation, the tariff rate is not yet final. If you notice, it keeps on changing. Let’s give it a few more months; the tariff will likely decrease further since we have nothing to offer the US government. We have already given so much,” PCCI president Enunina Mangio said on the sidelines of the Metro Manila Business Conference.
She cited as an example the cases of Cambodia and Vietnam, in which the tariffs eventually went down, and are now almost the same as those in the Philippines.
“And since we are an ally of the US, I am confident that the tariff rate for our export product will be lowered further. And since we have given so much, let us let them look at us as a future partner and ally,” she said, adding that she is confident that the country’s negotiating team can highlight the country’s advantage to the US government to enjoy a more preferential tariff versus neighboring countries in the ASEAN region.
A new adjustment was made by the White House on 31 July, marking a significant shift in US trade policy toward the region, with rates varying widely between member states.
The US trade charge remains the lowest in Singapore at 10 percent, while Cambodia, Philippines, Thailand, Indonesia and Malaysia were given 19 percent, placing them in the mid-tier bracket.
Vietnam’s rate is slightly higher at 20 percent, while Brunei faces a 23 percent rate, and Myanmar and Laos are hit with the steepest tariffs, each at 40 percent.
Despite this, Mangio further stressed that although PCCI and Philexport members have some apprehension, they are more into improving the country’s cost of logistics.
“If we can lower the cost of logistics, then we can be competitive and better off. The tariff imposed on various countries, I think, would affect Americans more than us,” Mangio said.