BY BRIAN DOCE
ON APRIL 3, President Donald Trump Jr. notified United States’ (US) trading partners of new tariff rates to revive the competitiveness of the domestic American economy by inviting multinational corporations to relocate their production back to the US mainland.
Regardless of the status of the relationship with the US, allies and non-allies were affected by Trump’s new economic protectionist measures. However, it must be clarified that these new tariff rates exempt export goods such as semiconductors, pharmaceuticals, and other critical minerals needed by the United States.
The Philippines – a long-time ally of the US in Asia – was slapped with 17% tariff rates in order for Philippine-based exporters to access the local American market. As a response, government officials downplayed the development and even claimed that the new global trade war of the second Trump administration even serves as an opportunity to position the Philippines as an alternative foreign investment destination.
Such optimism by our government officials is with basis. However, relocation of capital to the Philippines by interested foreign investors and experiencing its ancillary multiplier effects might take time, especially due to our own local protectionist measures (e.g., our own Constitution). Unfortunately, the Philippine economy will still probably feel the sting of the US economic protectionism
In this regard, what does this economic turmoil have to do with Mindanao?
As mentioned, semiconductors are exempted from Trump’s trade protectionism in order to discipline their trading partners. In this regard, the Philippine electronics industry – which covers semiconductors and integrated circuits – is, to a certain extent, safe, especially since this industry constitutes the majority of our export goods to the United States.
However, agricultural and food exports, raw and processed, are covered. Per the 2024 data of the Philippine Statistics Authority, the major agricultural goods imported by the US from the Philippines are coconut oil ($559M), pineapple and banana products ($203M), and processed food and beverages ($198M). Unfortunately, a significant chunk of these agricultural exporters is located in Mindanao. In this regard, it is safe to speculate that Mindanao-based exporters are the ones who will be most likely hit by Trump 2.0’s new wave of economic protectionism.
Why is Mindanao confined in a vulnerable position?
To answer the question, it is important to revisit Philippine economic history. In the 1970s, the former president Ferdinand Marcos Sr.’s government agreed to the economic liberalization prescriptions of international economic institutions such as the World Bank (WB) and International Monetary Fund (IMF). As a result, the Philippines shifted to an export-led growth strategy by devoting state support and assistance to the broader electronics industry, particularly the production of semiconductors and integrated circuits. This is at the expense of the agricultural sector, which served as the primary export industry of the country during the 1950s-60s.
While the succeeding administrations after the overthrow of the Marcos Sr. regime painted a picture of change, the only difference in terms of development policies from Cory Aquino up to the present is the façade of democracy. However, in terms of development policies, the new democratic government of 1987 and its successors only pursued the export-led industrialization model of Marcos Sr. and still focused on developing the electronics industry over agriculture. This is the reason it is wrong to claim that the Philippines is still an agricultural country. In fact, before 2025, there were online clamors regarding media reports on the Philippine importation of rice, fish, and salt from other countries despite the country having vast farmlands and being an archipelago itself.
Mindanao was at the crossroads of these developments. Since the early post-independence period after the Second World War, Mindanao has been viewed by the Manila-based government to serve as an agricultural powerhouse of the Philippines. In line with the export development policy reforms, especially from the 1970s-1990s, Mindanao was viewed to become a site of plantations for high-value crops such as coconut, bananas, pineapples, mangoes, and hemp.
In fact, years before the Philippines started to consider to fully participate in the World Trade Organization (WTO) in 1995, it was the Mindanao-based food producers, regardless whether engaged in direct exportation via the BIMP-EAGA route or serving as suppliers for Luzon-based food manufacturers, who expressed their anxiety regarding trade liberalization and the succeeding episodes of globalization.
Using regional economic foras such as the annual Mindanao Food Congress and other business events primarily organized by the Davao-based Mindanao Business Council, Mindanao-based food producers and their respective industry associations have pleaded to national government agencies such as the Department of Trade and Industry (DTI), Department of Agriculture (DA), and Mindanao Economic Development Council (MEDCO) for assistance and support to ensure their survival in the face of impending global competition.
At present, such legacy continues to exist since a significant number of high-value export crops’ plantations are located in various provinces of Mindanao.
While government intervention may potentially offset the sting of Trump’s tariff rates to our agricultural and food exporters, expect that food producers in Mindanao will complain about the costs of this new era of economic protectionism.
References
- https://www.bworldonline.com/top-stories/2025/04/04/663861/us-slaps-higher-tariff-on-philippines/?fbclid=IwY2xjawJeIu5leHRuA2FlbQIxMQABHqJ6aZfF0ys8T81Akqd8RgeLlpkdhY0OXYrs_g5CoE3BdrpcAq4sqFw1wrym_aem_bH15cTug3gHn2kHi3S55CQ#google_vignette
- Ofreneo, R. E. (1984). Contradictions in Export-led Industrialisation: The Philippine Experience. Journal of Contemporary Asia 14 (4), 485-495.
- de Dios, E. S., & Hutchcroft, P. D. (2003). Political Economy. In A. M. Balisacan, & H. Hill, The Philippine Economy: Development, Policies, and Challenges (pp. 45-76). Oxford: Oxford University Press.
- Abinales, P. N. (2020). Making Mindanao: Cotabato and Davao in the Formation of the Philippine Nation-State. Quezon City: Ateneo de Manila University Press.
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Brian U. Doce is a scholar-practitioner with a background in politics and international relations. Aside from being a lecturer in various universities in Manila, Brian has experience working in the space of business-government relations, policy advocacy, and diplomacy. He is currently finishing his PhD at the Indo-Pacific Research Centre of Murdoch University in Australia.
