Peso advances as Trump signals tariff flexibility
The peso appreciated against the dollar on Tuesday after US President Donald J. Trump’s announcement of higher tariffs on 14 countries, while hinting at being open to further trade negotiations.
It closed at P56.35 a dollar, up 33.5 centavos from its P56.685 finish on Monday, according to Bankers Association of the Philippines data posted on its website.
“The dollar-peso traded lower on risk-relief rally after President Donald J. Trump signaled he is open for trade talks,” a trader said by telephone.
The peso opened at P56.55, dipped to its weakest at P56.555, and strengthened to as high of P56.35. Trading volume rose to $1.67 billion, higher than the previous day’s $1.53 billion.
The peso was supported by Mr. Trump’s decision to extend the deadline for trade deals to Aug. 1 from July 9, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.
On Monday, the US President signed an executive order moving the effectivity of reciprocal tariffs to Aug. 1 from the original July 9 deadline.
Starting Aug. 1, the US will impose varying tariffs — 25% on Japan, South Korea, Tunisia, Malaysia and Kazakhstan; 30% on South Africa and Bosnia and Herzegovina; 32% on Indonesia; 35% on Serbia and Bangladesh; 36% on Cambodia and Thailand; and 40% on Laos and Myanmar.
However, he left the door open for last-minute talks.
“If, for any reason, you decide to raise your tariffs, then, whatever the number you choose to raise them by, will be added on to the 25% that we charge,” Mr. Trump said in letters addressed to Japan and South Korea, released via his Truth Social platform.
The letters also emphasized that the tariffs would be separate from existing ones, including those on cars, steel and aluminum.
Mr. Trump said the Aug. 1 deadline is “firm, but not 100% firm.” “If they call up and they say we’d like to do something a different way, we’re going to be open to that.”
Markets have remained cautious as Trump’s broader trade strategy continues to affect global economic forecasts.
The trader expects the peso to trade from P56.10 to P56.50 on Wednesday, while Mr. Ricafort sees a slightly narrower range of P56.25 to P56.50. — Aaron Michael C. Sy
