In this post:
- Thailand’s finance minister, Pichai Chunhavajira, revealed that his nation is thinking about lifting duties on additional American-imported items.
- Chunhavajira added that in order to lessen the effects of Washington’s tariffs, Thailand had prepared soft loans totaling around $6.1 billion (~200 billion Baht).
- As it prepared to create plans to lessen reliance on the United States, the Thai Commerce Ministry examined the effects of U.S. tariffs on particular industries.
“The country added a few items to its zero-tariff bracket on select products imported from the United States,” said Pichai Chunhavajira, Thailand’s finance minister.
In an effort to convince the United States to lower its 36% tariff rate on Thai goods, Thailand simultaneously reduced tariffs on 90% of its exports to the United States.
Chunhavajira clarified that the goal of removing additional U.S. imports from tariffs was to promote trade between the two nations. Thailand pledged to increase its imports from the United States in order to strengthen bilateral trade. The Finance Minister added that in order to lessen the effect of U.S. tariffs on regional companies, his government was ready to provide soft loans totaling about $6.1 billion (~200 billion Baht).
If an agreement was not reached by August 1, the United States threatened to impose a 36% tariff on Thai imports.
Thailand does, however, expect that after examining its suggested tariff cuts, the Trump administration will take lowering the rates into consideration.
The Thai National Shippers Council, or TNSC, stated that the 36% tariff rate would increase the cost of U.S. imports and that a 20% duty would be easier to administer.
Additionally, it can make domestic companies less competitive.
Chunhavajira thinks the high tariffs may restrict Thailand’s economic growth this year to 1%, which would be less than the 2.3% increase the country’s central bank had predicted.
The TNSC identified rice, processed foods, electronics, consumer products, and rubber as susceptible industries. Additionally, the Council anticipates job losses in labor-intensive industries. Additionally, declining farm incomes may put more strain on rural economies.
Chunhavajira claims that the latest tariff plan was informed by U.S. input
According to Minister Chunhavajira, the updated list of U.S. goods that are free from taxes was informed by input from U.S. trade representatives. Within ten years, the revised plan would balance trade with the United States, he claimed.
Prior to this, the Finance Minister stated that Thailand intended to lower taxes on U.S. corn and import more natural gas from the United States. According to the Thai Feed Mill Association (TFMA), a 73% import tariff was imposed on U.S. corn.
Chunhavajira further stated that beyond the conclusion of the 90-day tariff respite, trade negotiations between the two nations were anticipated to continue. He emphasized that discussions necessitated stakeholder consultations.
“I think the conditions that we have set are very favorable and should satisfy their needs…we are not offering zero tariffs across the board but we do offer zero tariffs for a significant number of products.”– Pichai Chunhavajira, Finance Minister and Deputy Prime Minister of Thailand
Chunhavajira questioned why the United States had not examined Thailand’s updated tariff proposal prior to the confirmation of the 36% tariff threat. He did stress, though, that 10% of U.S. imports will continue to be subject to Thai government taxes. Thailand took this action to shield its own companies from the effects of free trade agreements with other nations.
Thailand considers the effects of tariffs on several industries
The Thai Commerce Ministry planned to create plans to diversify its markets and lessen Thailand’s reliance on the United States after analyzing the effects of Trump’s tariffs on particular industries.
Additionally, according to the ministry, Thailand was thinking about lowering tariffs on low-risk U.S. imports including apples and grapes. The Thai government, however, was determined to safeguard delicate goods like grain, soybeans, and pork.
Due to pressure from low demand and the growing usage of synthetic rubber, a market dominated by the United States, the rubber sector was already down 36% year over year.
According to the Federation of Thai Industries, the nation would suffer losses of about 900 billion Baht the next year if the present uncertainties are not resolved.
According to the Federation, if the U.S. tariffs are not changed, Thailand could drop to fourth place among ASEAN investment destinations, behind Vietnam, Indonesia, and Malaysia. Cambodia and other low-cost nations may attract foreign direct investment (FDI), especially in the food processing, electronics, and equipment industries.
The Board of Investments 2025 warned that up to one million jobs could be lost as a result of the wider economic consequences, putting its FDI target of 800 billion Baht in jeopardy. Additionally, the Thai Chamber of Commerce cautioned that companies would probably turn to automation if Thailand’s approved tariffs were higher than Vietnam’s by over 50%.
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