US President Donald Trump has confirmed reciprocal tariffs on imports from 14 countries, maintaining Thailand's rate at 36%, effective August 1, 2025. Thailand's Finance Minister Pichai Chunhavajira remains hopeful that negotiations will lead to a reduction before the tariff comes into force.
According to Bloomberg and The Nation, the US may not have fully factored in Thailand's latest proposal, submitted on July 6, 2025, during a trade delegation visit to Washington. With around 20 days left before implementation, Thailand aims to convince the US to decrease the tariff below 36%. The proposal seeks to reduce the US$46 billion trade deficit between the two countries by 70% over five years, emphasizing increased purchases of American agricultural products, energy commodities, and Boeing aircraft.
According to Pichai, the revised plan would lower tariffs on 90% of US imports into Thailand, with some items potentially receiving zero tariffs. However, tariffs on approximately 10% of goods would remain to shield local industries. The proposal was prepared in consultation with the US Trade Representative (USTR), and Pichai is optimistic about further US consideration.
Vietnam secures early deal amid regional concerns
Vietnam was the first Southeast Asian country to secure a trade agreement with the US, facing tariffs of 20% on general exports and 40% on re-exported goods. Analysts predict that Malaysia and Thailand could face similar re-export tariff regulations. Simultaneously, the US Department of Commerce is reportedly drafting export restrictions on AI chips headed to Thailand and Malaysia, aiming to prevent re-export of advanced chips to China. This policy could hinder the growth of data center infrastructure in both nations.
Thailand confronts additional economic challenges, including slow consumer markets and political instability triggered by the suspension of Prime Minister Paetongtarn Shinawatra. Experts warn that without tariff relief, Thailand risks increased unemployment and factory shutdowns in the latter half of 2025, with deterioration expected to continue into 2026.
Minister Pichai underscored the urgency for Thailand to restructure its economy by reducing export dependency, bolstering domestic industries, and revitalizing the agriculture and tourism sectors to mitigate mounting economic pressures.
Private sector calls for strategic trade response
Thailand's private sector has expressed significant concern over the 36% tariffs announced by President Donald Trump on July 8, 2025, set to take effect in August. The Federation of Thai Industries estimates that these tariffs could reduce Thai exports by approximately THB800-900 billion (around US$24.5-27.6 billion).
According to Bangkok Post, Sanan Angubolkul, chairman of the Thai Chamber of Commerce, emphasized the need for a special team led by the prime minister, comprising both public and private sector representatives, to develop proactive strategies in light of the drastic changes in US trade policy.
Meanwhile, The National Thailand reported that the private sector is urging a restructuring of Thailand's economy to ease tariff impacts, emphasizing increased imports of key US agricultural goods like maize, soybeans, beef, seafood, and dairy to balance trade, while cautioning against imports like pork that may harm local industries. They are also seeking to fast-track free trade agreement talks with the EU and Canada via ASEAN by year-end.
Thailand's automotive industry, a major economic pillar, faces a 24% decline in production and sales in 2025, the sharpest in decades, with tariffs threatening to worsen the slump and prompting calls for immediate support measures.
Article edited by Jerry Chen
