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BS REM INTERNET TECHNOLOGY IN REAL ESTATE Activity #2

The economic policies of U.S. President Donald Trump, particularly increased tariffs, indirectly impacted the Philippine economy through a global trade slowdown, supply chain disruptions, and weakened investor sentiment. The Philippines faced challenges such as reduced export demand, currency depreciation, and limited investment opportunities, despite some potential benefits from companies relocating operations. Overall, these developments underscored the vulnerabilities of the Philippine economy to external shocks and the need for enhanced resilience and competitiveness.

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Marc Nixon Pelayo
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14 views2 pages

BS REM INTERNET TECHNOLOGY IN REAL ESTATE Activity #2

The economic policies of U.S. President Donald Trump, particularly increased tariffs, indirectly impacted the Philippine economy through a global trade slowdown, supply chain disruptions, and weakened investor sentiment. The Philippines faced challenges such as reduced export demand, currency depreciation, and limited investment opportunities, despite some potential benefits from companies relocating operations. Overall, these developments underscored the vulnerabilities of the Philippine economy to external shocks and the need for enhanced resilience and competitiveness.

Uploaded by

Marc Nixon Pelayo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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MARC NIXON T.

PELAYO
How Philippine Economic Significantly Affected by the Tariff of USA?
The economic policies implemented by U.S. President Donald Trump, particularly the
increase in tariffs against major trading partners like China, significantly affected global markets.
Although the Philippines was not directly targeted by these tariffs, the country nonetheless
experienced indirect but meaningful economic impacts. These consequences were primarily felt
through a slowdown in global trade, disruptions in supply chains, financial market volatility,
weakened business sentiment, and limited opportunities for economic realignment.
One of the most immediate effects of the Trump administration’s tariff hikes was a global
trade slowdown. As the United States and China engaged in a prolonged trade war, international
commerce contracted, leading to reduced demand for exports worldwide. The Philippines, being
heavily reliant on exports such as electronics and semiconductors, was vulnerable to this decline.
Philippine exporters faced weaker demand from global markets, particularly from China and the
United States, two of the country's major trading partners. This contraction in trade slowed down
Philippine economic growth and created pressures on key industries that depended on stable
international demand.
In addition to reduced trade volumes, the Philippine economy also suffered from supply
chain disruptions. Many Philippine industries are integrated into the global supply chains,
especially those connected to Chinese manufacturing. As tariffs made the movement of goods
between the United States and China more expensive and uncertain, multinational companies
reassessed their sourcing and production strategies. This shift created disruptions that trickled
down to Philippine suppliers, leading to lower production orders, reduced income, and even job
losses in certain sectors.
The uncertainty caused by the escalating trade war also reverberated through financial
markets. Global investors, seeking safer assets, pulled investments out of emerging markets,
including the Philippines. As a result, the Philippine peso weakened against the U.S. dollar, and
stock market volatility increased. This added further pressure to the Philippine economy, making
imports more expensive and eroding consumer purchasing power.
Moreover, the negative sentiment generated by the trade tensions made businesses more
cautious. Both foreign and local investors delayed or canceled planned investments in the
Philippines, wary of the unpredictable international environment. The lack of new investment
further limited the country's economic growth prospects at a time when increased capital inflows
were crucial for infrastructure development and job creation.
However, the trade tensions also presented potential opportunities for the Philippines.
Some companies, seeking to avoid U.S. tariffs on Chinese goods, explored relocating their
operations to other countries. This "China plus one" strategy created a window for Southeast
Asian nations, including the Philippines, to attract new investments in manufacturing.
Unfortunately, the Philippines was only partially able to capitalize on this opportunity. Countries
like Vietnam and Malaysia, with better infrastructure, more favorable investment policies, and
faster regulatory processes, captured a larger share of these relocations.
In conclusion, while President Trump's tariff increases were not aimed directly at the
Philippines, their ripple effects significantly impacted the Philippine economy. The country faced
slower export growth, supply chain disruptions, currency depreciation, and reduced investment
inflows. Although there were openings to benefit from shifts in global manufacturing patterns,
the Philippines struggled to fully seize these opportunities. Overall, the Trump administration’s
trade policies highlighted the vulnerabilities of the Philippine economy to global external shocks
and the urgent need for stronger economic resilience and competitiveness.

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