Philippines could be hit worst in Southeast Asia by US-China trade spat

MANILA, Philippines — Among Southeast Asian countries, the Philippines could be the most affected in the worsening trade tension between the U.S. and China.

In a surprise move that could further escalate the trade war between the two economies, President Donald Trump on Thursday said he has ordered the U.S. trade representative to consider imposing an additional $100 billion in tariffs on Chinese goods.

Trump’s pronouncement came after China said it plans to slap $50 billion in taxes on American products.

In a research note dated April 4, RHB Bank Berhad said the trade war’s impact on Southeast Asia will likely be felt through shipments to China that are used as inputs to Chinese exports.

The Malaysian bank then explained that the Philippines could be most at risk, as 16.9 percent of its total exports are part of China’s value chain, compared with countries like Malaysia (11.4 percent) and Indonesia (10.9 percent).

“The sectors likely to be hit badly from US tariffs are electronics, electrical machinery (computers, etc), and industrial,” RHB Bank said. “It appears that the impact on ASEAN, while small, will not be negligible.”

In a report by ABS-CBN News published last month, Trade Secretary Ramon Lopez said the Philippines is in “wait and see” mode in the face of the trade dispute.

Government data show the Philippines’ shipments to China valued at $591.91 million last January, making the Asian powerhouse the fourth top destination of Philippine exports for the month.