US Trade Policies: What Every Filipino Business Owner Needs to Know

In today’s uncertain global economy, a significant challenge looms large for Filipino Small and Medium Enterprises (SMEs): shifting US trade policies, most notably the non-renewal of the US Generalized System of Preferences (GSP). As international trade rules shift and economic relationships evolve, many Filipino business owners are asking – how does this affect me, and what can I do to safeguard my business?

Here’s a clear, localized breakdown of what’s happening and how Filipino SMEs can respond.

Understanding the Trade Situation

As of mid-2025, a primary concern for Filipino exporters to the US is the lapsed Generalized System of Preferences (GSP). The GSP program, which allowed duty-free entry for thousands of Filipino products, expired on December 31, 2020, and its renewal by the US Congress remains pending. This means that Filipino products previously eligible for GSP benefits now face standard US tariffs, effectively increasing costs for importers and potentially reducing demand.

Beyond the GSP, other US trade actions can also impact Philippine businesses:

• General Tariffs: The US maintains a schedule of tariffs applicable to various goods.
• Anti-Dumping and Countervailing Duties (AD/CVD): Extra charges can be imposed on specific products if US authorities determine they are being sold at less than fair value (dumping) or benefiting from unfair government subsidies (countervailing).
• Specific Tariffs: Certain sectors, like steel and aluminum, have faced special tariffs under US trade measures (e.g., Section 232), which can affect Filipino exporters in these industries or those using these materials in their products.

Although some broader US trade measures are often focused on major economies like China, Filipino businesses still feel the impact, especially through supply chain complexities, rules of origin checks, and the overall increased cost of trade due to the GSP lapse.

These trade conditions affect key industries where many Filipino SMEs operate, such as electronics, agricultural products (e.g., coconut oil, fruits, fish), garments and textiles, travel goods, and furniture.

How US Trade Policies Are Affecting Filipino SMEs

For Filipino SMEs, the problem is not just higher costs due to lapsed GSP or other potential tariffs. Profit margins are shrinking, supply chains face disruptions, and navigating complex US customs regulations is becoming harder. Many SMEs lack the dedicated personnel or extensive experience to handle these changes efficiently. As business competitiveness is challenged, there are also fears about job cuts and staff uncertainty.

Some businesses may be forced to delay or cancel export orders because they can no longer offer competitive prices without GSP benefits. Others are spending valuable time and money on understanding compliance with US regulations – time that could be better spent on innovation and business growth.

The uncertainty surrounding GSP renewal and other US trade policies makes it difficult for SMEs to plan ahead. Investments may be put on hold, and hiring decisions could be delayed. Even decisions as simple as renewing a supply agreement become more complicated when the tariff landscape is unclear.

For many businesses that already operate with thin margins and limited cash flow, any miscalculation, unexpected duty, or delay can significantly impact their viability.

What Filipino SMEs Want to Know

Many SME owners are searching for clear answers. They’re trying to determine the current tariff status of their products now that GSP benefits are not in effect and how to manage the increased costs. The rules can be complex and subject to change based on US legislative action regarding GSP or other trade policies.

They also want to know what kind of help is available. While they may have heard of agencies like the Department of Trade and Industry (DTI) and its arms like the Export Marketing Bureau (EMB) or the Philippine Trade Training Center (PTTC), and financing options through the Small Business Corporation (SB Corp), the specific steps to get support for these trade-related challenges aren’t always clear. This uncertainty adds to stress.

Ensuring compliance with US trade rules is another major concern. Without expert help, understanding the necessary documentation, certifications, and customs procedures can be overwhelming.

Some SMEs are considering diversifying their export markets to reduce reliance on the US. But exploring new markets takes time, resources, and confidence – commodities that many feel are strained.

SME owners are trying to adapt, but they need guidance that is easy to follow and relevant to their current challenges, particularly regarding the GSP situation.

What SMEs Can Do Now

Here are some practical steps that SME owners can start taking immediately:

1. Know Your Risks: Start by thoroughly understanding how your business is affected.
   1. Identify which of your products were previously eligible for US GSP.
   2. Determine the current Most Favored Nation (MFN) tariff rates applicable to these products in the absence of GSP.
   3. Assess the impact of these tariffs on your pricing and competitiveness.
   4. Stay updated on any potential AD/CVD investigations relevant to your products.
2. Reach Out for Support: Contact government agencies like the DTI (particularly the EMB and your regional DTI office), PTTC, and SB Corp. They offer various forms of assistance:
   1. Information on export procedures and market requirements.
   2. Training programs on export marketing and trade compliance.
   3. Access to finance through loans and guarantee schemes.
   4. Assistance in exploring new export markets.
   5. Updates on the status of GSP renewal advocacy.
3. Ensure Compliance: Make sure you’re following all US customs and import regulations correctly. This may include accurate product classification (HS codes), proper valuation, rules of origin documentation, and any specific certifications required for your products. Consider consulting with customs brokers or trade consultants familiar with US trade rules.
4. Explore New Markets: Don’t rely solely on the US market. Markets in ASEAN, East Asia (Japan, South Korea, China), Australia & New Zealand, the Middle East, and Europe (leveraging the EU GSP+ where applicable) may provide better opportunities and less uncertainty. The DTI-EMB can provide market intelligence and support for diversification.
5. Review Your Business Agreements: Check your current contracts with US buyers.
   1. Discuss the impact of tariffs (due to lapsed GSP) and explore possibilities for cost-sharing or price adjustments.
   2. Consider incoterms that clearly define who bears the cost of duties.
   3. Explore sourcing materials from local or regional suppliers to reduce supply chain risks and potentially meet rules of origin for other trade agreements.
6. Advocate and Stay Informed: Engage with your industry associations and business chambers. These organizations often advocate for SME interests, including the renewal of the US GSP, and can provide valuable updates.

Why It’s Important to Act Now

The lapse of the US GSP and other trade policy shifts is more than just a policy change – it’s a reminder of how quickly things can change. For many Filipino SMEs, heavy reliance on the US market, often facilitated by GSP benefits, has been a long-standing strategy. Current challenges highlight why diversification and adaptability are now essential.

Instead of seeing this as only a threat, consider it a chance to future-proof your business. The quicker you understand your new cost structures and market position, the sooner you can adapt your plans, seek available support, and position your business to compete more confidently.

Early action makes a difference. Businesses that take steps now – whether it’s re-evaluating pricing, exploring new markets, seeking advice from DTI, or strengthening supply chains – will be better equipped to handle not just this situation, but any future disruptions. It’s not about panic. It’s about preparation and building a stronger, more resilient path forward.

What’s Next

Filipino SMEs have proven time and again that they can weather storms – from economic downturns to a global pandemic. While this latest challenge stemming from US trade policies, particularly the GSP lapse, is significant, it also opens the door to new strategies and smarter growth. Trade policies may change, but so too are the tools and support systems available to help businesses adapt.

For example, if you’re unsure about your tariff exposure without GSP, now is a good time to consult with the DTI’s Export Marketing Bureau or hire a trade advisor to walk you through your product codes and applicable duties. If your business relies mainly on the US market, consider actively exploring export opportunities in markets like Japan, South Korea, or Australia, where demand for Filipino-made goods may be growing and trade agreements might offer advantages.

The key is not to freeze, but to move forward in informed, practical ways. Stay connected to trusted sources like the DTI. Talk to your peers and industry associations. Attend trade webinars and information sessions. Reach out to agencies for help applying for available support programs. Every action, no matter how small, strengthens your business for what’s ahead.

At StoreHub, we’re committed to walking this journey with you. We’ll keep providing updates, useful tools, and inspiring SME stories so you can make confident, informed decisions. Because in today’s world, survival means being proactive, adaptable, and ready for anything.