Thailand's export sector is dealing with a new challenge as the United States has enforced a 36% tariff on Thai goods under the Reciprocal Tariff programme, a rate surpassing those for Vietnam at 20% and Malaysia at 25%, effective from August 1, 2025.
On July 6, Thailand proposed a second-round negotiation with the United States, aiming to speed up the trade balance adjustment. The goal is to reduce the trade surplus with the US by 70% by 2030 and balance trade by 2031-2032. Part of the proposal offers zero tariffs on certain agricultural products, while also increasing imports of natural gas and aircraft. Thailand clarified that these initiatives should not undermine countries holding Free Trade Agreements with Thailand.
The Permanent Secretary of the Ministry of Finance, Lavaron Sangsnit, pointed out that this new proposal includes thousands of items for a 0% tariff, notably many agricultural products. However, this could pose challenges for specific domestic industries.
According to an official from the Government House, the proposal aligns with the Regional Comprehensive Economic Partnership, maintaining unchanged commitments to other trading partners. Currently, Thailand's Most-Favoured-Nation tariff rate is high at 27% for agricultural products, making it one of ASEAN's highest, with an average MFN tariff of 9.8% in 2023.
Thanakorn Kasetsuwan, Chairman of the Thai National Shippers' Council, highlighted the 36% US tariff as disadvantageous, stating, "Thailand must secure a deal, or at least reach a 20% tariff deal similar to Vietnam." If unresolved by August 1, the tariffs will impact sectors like electronics, processed food, rice, and rubber. This could increase export costs and reduce competitiveness in the US market.
Kongrit Chantrik, TNSC's Executive Director, warned of a 5–10 year recovery if the 36% tariff remains. The TNSC recommended urgent measures, like negotiating tariff reductions and exploring alternative markets. This includes enhancing trade promotion activities and leveraging existing free trade agreements. For domestic economic protection, it suggests reviewing cost reduction strategies and strengthening import regulations.
Source: The Nation
