US Slaps 12.5% Tariff on Philippine Exports Over Forced Labor Import Ban Delay

The United States has slapped a fresh 12.5% tariff on Philippine exports after concluding that Manila has yet to ban goods made with forced labor from entering its market. The new duty replaces the flat 10-percent tariff on Philippine goods in place since February, imposed after the US Supreme Court struck down the Trump administration's earlier reciprocal tariffs. That levy expired today after 150 days. "Based on the findings in the investigation of the Philippines, considering the public comments, testimony, and the advice of the Section 301 Committee, as well as the advice of advisory committees, and in accordance with the specific direction of the President, the Trade Representative has determined to impose 12.5% tariffs on products of the Philippines," the Office of the US Trade Representative (USTR) said in a notice posted Friday, July 24 (Philippine time). The duty is the higher of the two rates US Trade Representative Jamieson Greer imposed on 60 economies at the close of their investigations under Section 301 of the US Trade Act of 1974. Forty other economies were hit with the same 12.5% rate, while 17 — including Southeast Asian countries Cambodia, Indonesia, and Malaysia — got 10% because they already ban forced-labor imports or have committed to do so in trade deals with Washington. The USTR found the Philippines and 53 other economies "failed to impose and effectively enforce a forced labor import prohibition." "Today's action will begin to correct what is both a human rights abuse and distortive trade practice," Greer said in a statement. Most of the country's major exports to the US are exempt, including electronics and semiconductors, which are its top export commodities to the US. The exemptions, as stated in the notice, cover a broad range of raw materials whose taxation could choke domestic US supply, products that could cause economy-wide disruptions, and goods the US cannot produce in sufficient quantities or at reasonable prices. A 2024 report by the US Department of Labor's Bureau of International Labor Affairs listed the Philippines as having products made with "inputs that are produced with child labor." Specifically, the flagged Philippine products are banana, coconut oil, coconuts, fish, rice, and sugarcane, among others. The list also includes "pornography" in the Philippines as being produced with "child labor."