ICHRP Sheds Light on U.S. Trade Pacts with Vietnam, Indonesia, and the Philippines: Rising Concerns Over Inequality and Domestic Repercussions

The United States' bilateral trade agreements with three countries in Southeast Asia (the Philippines, Indonesia, and Vietnam) in 2025 show clear asymmetries. While imposing substantial duties on partner countries' exports, each agreement gives the United States zero-tariff access to important import sectors. This discrepancy has drawn criticism from domestic academics and nongovernmental organizations, who contend that the agreements worsen inequality, limit industrial policy, and place the cost of compliance on smaller businesses. Restoring balance will require strategic investments in customs capacity, market diversification, and regional coordination to ensure equitable and sustainable economic integration.

Vietnam: Asymmetrical Market Access

The U.S.-Vietnam framework sets a 20 percent tariff on most Vietnamese exports to the United States, rising to 40 percent for goods suspected of transshipment. In contrast, Vietnam must eliminate all tariffs on U.S. imports, including heavy-duty vehicles.

Key domestic criticisms:

Lack of clarity on "substantial transformation" criteria creates compliance uncertainty for manufacturers.

Small and medium-sized exporters report margin compression and delayed orders as buyers wait for definitive tariff rules.

NGOs highlight that zero-tariff access for American automakers undermines Vietnam's nascent automotive and metal-smelting industries.

Indonesia: Concessions and Local Industry Risks

Indonesia secured a cap of 19 percent on U.S. duties-down from an initial threat of 32 percent-while affording zero-tariff entry for U.S. goods. Jakarta also committed to major U.S. equipment and commodity purchases.

Observations from domestic experts:

Analysts warn that flood of tariff-free U.S. agricultural imports undercuts smallholder farmers and drives industry consolidation.

Customs brokers and exporters face steep compliance costs to certify origin and prevent rerouted Chinese goods.

Nigeria of the Association of Strategic Socio-Economic Cadres terms the agreement "a one-sided bargain" that deepens import dependence and widens the trade deficit.

Philippines: Bargaining Power and Sovereignty Concerns

Facing a possible tariff increase from 17 to 20 percent, the Philippines negotiators aimed to secure a 10 percent cap. Any deal, however, obliges Manila to grant U.S. imports preferential treatment and restrict non-commercial subsidies.

Domestic criticisms include:

The Food Processors and Exporters Organization warns that higher duties on sectors like coconut-based products will divert buyers to neighboring countries, risking job losses.

Civil society coalitions [https://ichrp.net/ichrp-on-trump-marcos-meeting-peace-must-be-based-on-justice-not-deterrence/] decry "economic coercion," arguing that unilateral revocation clauses infringe national policy autonomy.

Industrial policy experts note that prohibitions on state support hinder efforts to develop competitive domestic value chains.

Recommendations

To mitigate inequality and safeguard long-term growth, governments and businesses should:

Invest in digital customs platforms and blockchain verification to streamline origin certification.

Intensify efforts to diversify export destinations through RCEP, CPTPP, and new bilateral FTAs.

Strengthen domestic value chains by supporting high-value manufacturing and reducing reliance on low-margin assembly.

Coordinate ASEAN-wide positions to restore collective bargaining power and defend multilateral trade norms.

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