Impact of Philippines US Trade Deal on US Importers (by HTS codes)

For more information or check your specific HTS code details visit: https://www.agfus.com/tariffs

Here’s a detailed overview of how the new U.S.–Philippines trade agreement—announced on July 22, 2025—could impact U.S. importers using Harmonized Tariff Schedule (HTSUS) classifications:

Key Terms of the Agreement

• The U.S. will impose a 19% reciprocal tariff on imports from the Philippines (up from 17% announced in April, but below a previously threatened 20%) Reuters+5Reuters+5Politico+5.

• In return, the Philippines agreed to zero tariffs on U.S. exports, especially in sectors like autos, pharmaceuticals, soy, and wheat Reuters+1AP News+1.

HS Chapters Likely Affected

1. Electronics / IT Equipment (Chapter 84 & 85)

• Products like computers, servers, integrated circuits, and related electronics may fall under current exemptions, courtesy of WTO’s Information Technology Agreement (ITA) — which historically provides duty-free access on many IT products Wikipedia.

• Recall that the U.S.'s Reciprocal Tariff regime specifically exempts items under HTS codes 8471 and 8473.30 as of April 11, 2025 Reuters+9dimerco.com+9millerchevalier.com+9.

• Conclusion: Most electronics from the Philippines may already be tariff-free, but importers should verify alignment with the US ITA and existing exclusions.

2. Automobiles and Auto Parts

• Per Section 232, the U.S. applies separate auto tariffs (25% previously). Under this deal, the Philippines will remove tariffs on U.S. autos, while U.S. imports of autos from the Philippines will now face 19% — potentially impacting HTS chapters 87.x Reuters+2Reuters+2Wikipedia+2Shapiro+1Politico+1.

3. Agricultural Goods (Chapters 1–24)

• Key export categories like soy, wheat, and pharmaceuticals from the U.S. may increase U.S. competitiveness. Conversely, U.S. importers purchasing Philippine produce, processed foods, or agri-based goods may now see a global 19% tariff under applicable HTS headings.

4. Other Manufactured Goods (Chapters 25–99)

• Importers of textiles, machinery, chemicals, etc., from the Philippines should now apply a 19% duty regardless of product—unless specifically exempt under separate WTO agreements or listed exemptions in the reciprocal tariff scheme.

Checklist for U.S. Importers by HTS Code

Step	Action
1.	Identify if your HTS chapter/code overlaps with electronics/IT (e.g., 8471, 8473) to qualify for exemption.
2.	For automotive HTS chapters, update tariff rate application to 19%.
3.	Agricultural or processed goods: apply 19% – consider IRA or free trade exceptions.
4.	Goods eligible for Chapter 98 entries, drawback, or containing ≥20% U.S. origin content may reduce base duty exposure — yet note the reciprocal rate still applies to foreign‑origin value Reutersmillerchevalier.com.
5.	Check whether your customs broker profiles honor post-facto exemptions or PSC filings for entries since April 5, 2025 (making correction before duty payment) dimerco.com.

Strategic Implications

• Rationalization for electronics importers: Many electronics may remain tariff‑free due to ITA coverage and prior tariff exclusions—so actual impact may be limited for these codes.

• Tariffs on consumer/imported Philippine goods: Retailers, food manufacturers, and automotive parts businesses importing from the Philippines must adjust landed cost models to account for 19% duty.

• Importers should proactively audit HTS codes to ensure classification is correct—and leverage retrospective corrections (PSC) if duties were previously mis‑assessed under prior 10–17% reciprocal tariff levels.

• Future changes possible: If further negotiation alters country-specific rates after August 1, 2025, these may replace the 19% rate dimerco.comtradecomplianceresourcehub.com.

What You Should Do Next

1. Review your import portfolio for Philippine-sourced goods and map HTS codes.

2. Update your customs compliance workflows to apply 19% tariff on eligible entries.

3. Engage your customs brokers to process PSCs for entries filed since April 5 (if applicable).

4. Monitor legal and regulatory updates, including the resolution of ongoing litigation on IEEPA authority.

5. Watch for new or revised HTS exclusions, including possible product-specific carve-outs in electronic or agricultural sectors.

In summary: under the new Philippines–U.S. trade agreement (announced July 22, 2025), U.S. importers will generally owe a 19% reciprocal tariff on Philippine-origin goods—unless their products fall under existing exemptions (such as electronics under ITA, automotive via Section 232, or Chapter 98/used U.S.‑origin content rules). Importers should verify HTS classifications, adjust costing models, and consider retroactive relief where applicable.

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