Thailand Fights Back: New Tariffs Counter US Hike
Thailand Braces for Impact of US Tariff Hike: Prime Minister Outlines Negotiation Strategy
BANGKOK—Thailand is preparing for a trade battle after U. S. President Donald Trump announced a steep 36% import tariff on Thai goods as part of his “Reciprocal Trade and Tariffs” policy. This new levy, significantly higher than the baseline 10% tariff imposed on imports from all countries effective April 9, 2025, has prompted the Thai government to act, with Prime Minister Paetongtarn Shinawatra outlining a multi-pronged negotiation strategy. This move reflects the rising global tide of protectionism, echoing similar trade disputes between the U. S. and other nations in recent years, including the escalating trade war with China. The tariff hike has the potential to significantly reshape global supply chains and impact U. S. consumer prices.
In a recent interview, Prime Minister Shinawatra acknowledged the gravity of the situation, stating, “The 36% figure is quite high, and so we have prepared both short-term and long-term plans. In the short term, we need to look at what we can negotiate to help exporters and find ways to support or relieve them.” The Thai government is navigating a complex situation, recognizing the U. S. aim to rebalance trade while also emphasizing the potential negative impact on all trading partners and U. S. consumer purchasing power.
“Nowadays, negotiations follow the ‘more for less, less for more’ approach and not simply unilateral demands.”
Thailand is restructuring its import tariffs on U. S. goods as a key negotiating tactic. A dedicated team, led by Pansak Vinyaratn, Chief Advisor on Policy to the Prime Minister, has been established to oversee trade matters with the United States. This team is meticulously reviewing all imported and exported products to identify potential leverage points. Formal negotiations, guided by the principle of reciprocity, will be spearheaded by the Permanent Secretaries of the Commerce and Finance ministries, in conjunction with their U. S. counterparts. This structured approach represents a shift from past trade negotiations, which often lacked transparency and left affected parties unprepared. According to a report from Khaosod English, the Prime Minister has emphasized the multi-stage nature of the negotiations, involving discussions at various levels, including ministerial-level talks.
Addressing public concerns about the seemingly inflated tariff figures quoted by the U. S., Prime Minister Shinawatra clarified the discrepancy, attributing it to differing calculation methodologies. She also addressed the issue of Chinese goods being relabeled as Thai exports, assuring that controls are being tightened to combat this practice. The government has been proactive, forming a working group on U. S. trade policy as early as January 6, 2025, anticipating shifts in the U. S. trade landscape under the new administration. This foresight allowed Thailand to begin formulating proposals for trade rebalancing well in advance of the tariff announcement.
The opposition has also weighed in on the unfolding trade dispute. Weerayut Kanchoochat, Deputy Leader of the People’s Party, has put forward proposals urging the government to:
- Strategically utilize existing trade practices considered obstacles by the U. S. as bargaining chips, phasing them out gradually rather than abandoning them outright.
- Ensure transparency in the negotiations, disclosing information about potential winners and losers to avoid repeating the perceived secrecy surrounding past trade agreements. This emphasis on transparency aims to provide businesses, particularly small and medium-sized enterprises (SMEs), with the necessary information to adapt to the changing trade landscape.
The opposition also stresses the importance of providing support for those negatively impacted by the tariffs and encourages the government to explore alternative supply chains, envisioning a future less reliant on both the U. S. and China. This proactive approach aims to mitigate the potential fallout from the escalating global trade war.
The ramifications of this trade dispute are far-reaching. The increased tariffs could lead to higher prices for U. S. consumers, potentially dampening demand for Thai goods. For Thailand, the tariffs threaten to disrupt existing trade flows and impact export-oriented industries. The long-term consequences will depend on the outcome of the ongoing negotiations and the ability of both countries to find common ground. The situation is further complicated by the unpredictable nature of global trade dynamics, with ripple effects potentially impacting other countries and industries.
Addressing Potential Questions:
- Will these tariffs impact the price of Thai goods in the U. S.? Yes, it is highly likely that the tariffs will translate into higher prices for consumers in the U. S.
- What specific Thai industries are most vulnerable? Industries heavily reliant on exports to the U. S., such as the automotive and electronics sectors, are likely to be the most affected.
In conclusion, the U. S. tariff hike presents a significant challenge for Thailand. The government’s proactive approach, coupled with a clear negotiation strategy and a focus on supporting affected industries, aims to mitigate the negative impact. The ongoing negotiations between the two countries will be crucial in determining the long-term consequences for both economies and the broader global trade landscape. The situation underscores the increasing complexities and uncertainties in international trade relations, emphasizing the need for adaptability and strategic planning.
