{"id":3916,"date":"2025-05-23T12:21:06","date_gmt":"2025-05-23T11:21:06","guid":{"rendered":"https:\/\/kabayanremit.com\/blog\/?p=3916"},"modified":"2025-05-23T12:21:06","modified_gmt":"2025-05-23T11:21:06","slug":"what-are-tariffs","status":"publish","type":"post","link":"https:\/\/kabayanremit.com\/blog\/finance\/what-are-tariffs\/","title":{"rendered":"What are tariffs?"},"content":{"rendered":"
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Before we explore the effects of tariffs, let’s first clarify what they are. According to the <\/span>Council of Foreign Relations<\/span><\/a>, “Tariffs are a form of tax applied on imports from other countries.\u201d\u00a0<\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n\n\t

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For example, if Country A has a 10% tariff on wheat from Country B, Country B would need to pay that tariff when they export wheat to Country A.<\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n\n\t

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The amount a government charges for an import is usually a <\/span>percentage of the product’s value<\/span><\/a>. For example, if a product is \u00a3100, a 10% tariff would make it cost \u00a3110. <\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n\n\t

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\u201cEconomists say the costs [of tariffs] are largely passed on to consumers,\u201d reported CFR.<\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n

What\u2019s the news on tariffs?<\/h3>\n\t
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News on tariffs<\/span> have been making rounds online since the start of the year. But the most impactful developments made headlines on 2 April, when United States President Donald Trump declared a new set of what he dubbed “liberation day” tariffs that charge at least 10% on foreign goods sold to the US.<\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n\n\t

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The Philippines\u2014which mainly exports <\/span>electronics<\/span><\/a> to America\u2014was included in Trump\u2019s list, with the US proposing to charge 17% on Philippine goods entering America starting 9 April. However, this was postponed after Trump announced a <\/span>three-month pause<\/span><\/a> on tariffs higher than 10%.<\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n\n\t

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Exempted from the pause is China, whose goods will receive a 120% tariff plus another <\/span>25% tariff<\/span><\/a> that had been in effect since around February. Mexico and Canada were also affected by this earlier 25% tariff but are excluded from the newer 10% tariffs.<\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n

Why do countries charge tariffs?<\/h3>\n\t
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Countries charge tariffs for the following reasons:<\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n

To support locally produced goods and protect local industries<\/h5>\n\t
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A country may have an industry that is growing locally but would suffer if foreign competitors enter the country bringing a larger inventory of cheaper options for customers.<\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n

To protect buyers from foreign goods that may be unsafe to consume<\/h5>\n\t
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Some countries impose tariffs due to stricter material or ingredient regulations. For example, Country A may tax toys from Country B, where paint standards are more relaxed.<\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n

To earn money<\/h5>\n\t
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Also called revenue tariffs, these are used to generate additional income for a country. <\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n

To fight back against or punish another country they disagree with<\/h5>\n\t
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If Country A disagrees with Country B about their policy, or if a deal between the two countries falls through, Country A might impose tariffs on goods from Country B in retaliation.<\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n\n\t

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While tariffs may benefit the countries implementing them, it may also have negative effects on its citizens. These fees may lead to other countries implementing their tariffs in response, making things more expensive for the regular buyer. This is why tariffs in the US<\/span> have been making the <\/span>news<\/span>.<\/span><\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n

How will tariffs affect the price of goods?<\/h3>\n\t
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Some recent <\/span>news on tariffs<\/span> were about how these would affect the price of iPhones. <\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n\n\t

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According to tech news publisher <\/span>CNET<\/span><\/a>, “If Apple passed the full 145% China tariff costs on to customers, the iPhone 16 Pro Max with 1TB of storage could increase from [US]$1,599 to over $3,900.” <\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n\n\t

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Apple, an American brand, produces some of its products in China. And as of 12 April, smartphones, computers, and other gadgets are <\/span>exempted<\/span><\/a> from the new US tariffs.<\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n\n\t

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However, tariffs not only affect the price of gadgets but also the cost of groceries, clothes, and other everyday essentials.<\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n\n\t

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The Associated Press reported that <\/span>avocado growers<\/span><\/a> slowed production in Mexico after the US put 25% tariffs on Mexican imports earlier this year. The AP also published <\/span>news on<\/span> how <\/span>tariffs<\/span> may affect <\/span>car ownership<\/span><\/a> because of the possible increase in the cost of imported car parts.<\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n

Who Pays the Price of Tariffs?<\/h5>\n\t
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Since the things we make and buy now depend on a more global production process, other essentials\u2014like food, clothes, or household appliances\u2014may end up costing more because of the new tariffs from the US.<\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n\n\t

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Those who would bear the brunt of a possible rise in prices would be people with <\/span>lower incomes<\/span><\/a>, who spend a chunk of their money on essentials compared with those who earn enough to withstand <\/span>inflation<\/span><\/a>. <\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n\n\t

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The AP also reported another risk: New tariffs from the US may bring down profits for businesses in different parts of the world; it may also drive businesses to restructure their supply chains. This could cause some people to lose their jobs.<\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n

Will the Philippines be affected by the new US tariffs?<\/h3>\n\t
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In recent <\/span>news, the Philippine government has said the possible 17% <\/span>tariff<\/span> on goods we export to the <\/span>US<\/span> will have a <\/span>minimal effect<\/span><\/a> on the country and may even have some <\/span>advantages<\/span><\/a>.<\/p>\n\n\t\t<\/div>\n\t<\/div>\n\n\t

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The proposed 17% on Philippine exports to the US is the second lowest of <\/span>US tariffs<\/span> in Southeast Asia. The US assigned the baseline 10% tariff rate to Singapore and gave the highest rate, 49%, to Cambodia. This may lead international businesses to consider the Philippines as a more affordable manufacturing and agricultural partner in the region.<\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n\n\t

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However, Sec. Cristina Roque of the Philippine Department of Trade and Industry said her team is still hoping to schedule a meeting with the US Department of Commerce before the end of the three-month pause on <\/span>US tariffs<\/span> to find out what the final rate for the Philippines will be.<\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n\n\t

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“If 17 percent and our ASEAN neighbours are higher than us, of course that\u2019s advantageous for us,” said Roque to the <\/span>Manila Bulletin<\/span><\/a>. \u201cBut we don\u2019t know what will happen after 90 days so it\u2019s hard to speculate until we get to talk to my counterpart there in the US.\u201d<\/p>\n\n\t\t<\/div>\n\t<\/div>\n

How should I prepare for the new US tariffs?<\/h3>\n\t
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Tariffs may make everyday things more expensive. This will affect not only the Pinoys doing business in the Philippines but also OFWs.<\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n\n\t

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So how can Pinoys and OFWs prepare for a possible increase in prices? <\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n\n\t

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Here are some ways:<\/span><\/p>\n\n\t\t<\/div>\n\t<\/div>\n\n\t

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