Caught in the Crossfire: Will the Philippines Survive the U.S.-China Trade War?

By Louis ‘Barok‘ C. Biraogo — April 18, 2025

LUZVIMINDA Santos stands helpless as her Cavendish bananas blacken under Mindanao’s merciless sun. “The Americans demand 17% more,” she whispers, tears welling. “My buyers in California can’t pay that, and I can’t afford to ship.”

Across the South China Sea, Chinese Ambassador Huang Xilian offers a lifeline: deeper trade with Beijing, a “win-win” path to sidestep Washington’s tariffs. But Luzviminda, like millions of Filipinos, wonders if this is salvation or a trap. Caught between U.S. protectionism and China’s promises, the Philippines is a shrimp in the whale fight of superpower rivalry—a nation whose future hinges on navigating this perilous moment.

Tariff Tempest: Is America’s Trade War a Knockout Punch or a Wild Swing?

President Donald Trump’s 2025 tariffs, branded as “reciprocal” to balance trade deficits, have sent shockwaves through global markets. The 17% levy on Philippine exports, part of a broader policy hitting over 100 countries, is milder than the 145% slapped on China or the 46% on Vietnam. Yet, for a nation where the U.S. absorbs 16% of exports, the impact is real.

Economic Toll: Estimates suggest a $1.89 billion annual loss—equivalent to 40% of the Philippines’ 2024 education budget.
Key Sectors at Risk:
- Electronics (60% of U.S. exports) face disrupted supply chains.
- Agricultural goods (coconut oil, seafood) risk priced-out markets.
- OFW Impact: Overseas Filipino Workers (OFWs), whose $10 billion in U.S. remittances fuel consumption, could see jobs vanish if American demand slows.

This isn’t Smoot-Hawley, the 1930s tariff act that deepened the Great Depression, but echoes linger. Trump’s policies, like those of 95 years ago, prioritize domestic manufacturing over global trade, risking retaliation and economic isolation.

Unlike China, hit with crippling 145% tariffs, the Philippines benefits from a lighter touch, with a 90-day pause on some levies signaling negotiation room. Philippine Ambassador Jose Manuel Romualdez is pushing for talks, citing mutual benefits like the $5.58 billion F-16 deal, which tariffs could jeopardize. But the U.S.’s blunt approach alienates allies, treating Manila as collateral in a broader war against Beijing.

Counterargument: Some argue tariffs protect American jobs, boosting factories in Ohio over sweatshops in Asia. Yet, Manila’s 10% unemployment rate and reliance on export-led growth suggest a zero-sum game where Filipino workers lose most.

China’s Velvet Glove: Is Beijing’s ‘Win-Win’ Promise a Lifeline or a Leash?

Huang Xilian’s warning of a “ripple crisis” is both analysis and posturing. The Philippines’ 2025 GDP growth, projected at 6.1% by the World Bank, could slip to 5.8% if tariffs persist, with electronics and agriculture hit hardest.

Unverified Claims: Huang’s forecast lacks independent modeling from the IMF or World Bank.
Media Scrutiny: No major outlet beyond The Manila Times directly quotes Huang, raising questions about whether this is a calculated diplomatic volley rather than a substantiated forecast.

China’s “win-win” offer builds on initiatives like the Belt and Road Initiative (BRI) and the ASEAN-China Free Trade Agreement. Beijing is the Philippines’ top trading partner, with $40 billion in bilateral trade (2024), dwarfing U.S. trade.

Risks of BRI:

Debt Traps: Sri Lanka’s Hambantota port, ceded to China after defaults, looms as a cautionary tale.
Market Flooding: Manila’s informal economy fears Chinese imports could swamp local markets.

Geopolitical Strings: China’s aid often demands alignment. In the West Philippine Sea, Beijing’s 2024 vessel-ramming incidents undermine its rhetoric. Huang’s offer may deepen Manila’s economic reliance, forcing a diplomatic tightrope: align with Beijing and risk U.S. security ties, or resist and face isolation.

Manila’s Tightrope: Can the Philippines Dodge the Superpower Smackdown?

The Philippines is a U.S. treaty ally (1951 Mutual Defense Treaty) yet increasingly tethered to Chinese trade. Under Presidents Duterte and Marcos, Manila has oscillated between Beijing’s economic embrace and Washington’s security umbrella.

Human Toll:
- Batangas factory workers fear layoffs as U.S. orders dwindle.
- Mindanao farmers face bankruptcy, with 30% of agricultural jobs at risk.
- OFWs (e.g., nurse Maria Cruz) send home less as U.S. hiring slows.

Philippines’ Trade: U.S. vs. China (2015-2025)

1. Trade Volume Comparison (Billions USD)

Year	U.S. Trade	China Trade	Difference
2015	18.50	17.60	+0.90 (U.S.)
2016	18.20	22.00	-3.80 (China)
2017	17.44	25.50	-8.06 (China)
2018	18.70	30.20	-11.50 (China)
2019	19.64	34.80	-15.16 (China)
2020	18.00	35.50	-17.50 (China)
2021	20.50	38.70	-18.20 (China)
2022	23.30	40.00	-16.70 (China)
2023	23.50	45.60	-22.10 (China)
2024 (est.)	23.50	48.70	-25.20 (China)
2025 (est.)	22.80	52.40	-29.60 (China)

Note: China overtook the U.S. as top trading partner around 2016-2017. Projected 17% U.S. tariffs may impact approximately $1.89 billion in Philippine exports.

2. U.S. Export Composition (2024)

Sector	Value (Billions USD)	Percentage	Tariff Impact
Electronics	5.58	60%	High ($1.13B risk)
Agriculture	1.86	20%	High ($0.38B risk)
Other	1.86	20%	Moderate

Escaping the Vortex: Can Manila Steer Clear of the U.S.-China Maelstrom?

For the Philippines:

Negotiate tariff exemptions (like USMCA).
Accelerate ASEAN trade (RCEP’s tariff cuts).
Strengthen domestic industries (subsidies for farmers, tech startups).

For the U.S.:

Recalibrate tariffs to avoid pushing allies toward China.
Offer duty-free access via the Indo-Pacific Economic Framework (IPEF).

For China:

Address BRI transparency (publish debt terms).
Respect maritime rulings to bolster trust.

Final Thought:
The Philippines cannot pick a side without losing. Luzviminda Santos, stacking unsold bananas, doesn’t care about superpower egos. She needs markets, not metaphors. Manila’s challenge is to carve a path where sovereignty and survival align, before the tariff wars drown its dreams.