Thailand fears missing 1 Aug trade deadline as Trump links deal to border conflict

United States President Donald Trump has warned both Cambodian Prime Minister Hun Manet and Thailand’s acting Prime Minister Phumtham Wechayachai that Washington will not proceed with trade agreements while hostilities continue along the Thai-Cambodian border.

According to a government source, Trump made separate phone calls to the two leaders following an emergency meeting of the United Nations Security Council (UNSC) on July 26, 2025, which failed to produce a resolution demanding a ceasefire. 

Briefed by the US representative to the UNSC, Trump decided to intervene personally, urging both nations to pursue peace talks before continuing economic negotiations with the US.

The pressure comes at a critical moment, particularly for Thailand, which had submitted its final tariff proposal to the Office of the United States Trade Representative (USTR) last week. Hopes had been high for a deal before the August 1 deadline. 

The current US reciprocal tariff rate stands at 36% for Thailand and 49% for Cambodia—though Cambodia’s rate had recently been reduced to 36%.

Trump’s directive effectively freezes those discussions. A source at Government House confirmed that the US trade negotiation team has been ordered to suspend all talks with both countries until a ceasefire is reached.

“With the situation on the border escalating, it is increasingly unlikely that the Thai-US trade deal—now in its final stages—will be concluded in time,” the source said. “Thailand may have to temporarily accept the 36% tariff rate until the border conflict is resolved and talks can resume.”

The source added that while several countries may miss the August 1 deadline, Thailand and Cambodia face a unique delay due to the ongoing military clashes.

Thailand’s Finance Minister and Deputy Prime Minister Pichai Chunhavajira had previously expressed optimism that Thailand’s tariff rate would be adjusted in line with other ASEAN nations. He reiterated that hope in a statement on July 27, posted to social media.

In the same post, Pichai condemned the ongoing violence and called on Cambodia to halt its military aggression immediately in order to pave the way for diplomatic talks. He stressed that durable economic and trade partnerships must be built on peace.

“Most importantly, the lives and property of civilians must be protected,” he wrote. “The repeated targeting of hospitals, schools, petrol stations and convenience stores—clearly non-military sites—is a flagrant violation of international law, the UN Charter, and international humanitarian norms.”

Pichai warned that Cambodia’s actions risk deepening its international isolation and damaging its credibility in the global marketplace.

“This behaviour could ultimately destroy Cambodia’s prospects, both in terms of international trust and economic opportunity,” he wrote. “What’s even more alarming is the loss of credibility of Cambodia’s leadership, which continues to wage attacks on Thailand despite calls for peace—even as of the morning of 27 July.”

Thai industry leader reaffirms sovereignty stance

The chairman of the Federation of Thai Industries (FTI), Kriengkrai Thiennukul, on Sunday (July 27) reiterated Thailand’s unwavering stance on defending its sovereignty, saying the protection of Thai territory, lives and property must come before any economic considerations.

“While the private sector views the economy as a key driver of the country, we firmly believe that sovereignty and public safety are paramount,” Kriengkrai said. “A nation cannot sustain a functioning economy without security and stability.”

He stressed that Thailand’s position is not negotiable, and the government has a duty to ensure national security above all else. Kriengkrai cited the conflict between Hamas and Israel, noting that while Hamas launched the initial attack, Israel’s forceful response was a defensive necessity—underscoring how national security always comes first for any country. “Even the United States would do the same if its territory were under threat,” he added.

Cambodia lacks sincerity in ceasefire efforts

Kriengkrai also expressed support for US President Donald Trump’s efforts to act as a mediator between Thailand and Cambodia, saying the world needs leaders who push for peace. However, he questioned Cambodia’s sincerity after it continued military attacks despite pledging to stop.

“Shortly after President Trump spoke with both leaders, explosions and gunfire from the Cambodian side continued into the early hours. This shows a clear lack of good faith,” he said. “We urge the United States to use every available measure to pressure the side that initiated the conflict and has failed to honour its commitment to de-escalate.”

Kriengkrai insisted that Thailand has never been an aggressor, but it will not tolerate any violation of its sovereignty. He welcomed the prospect of returning to bilateral talks, but stressed that any negotiation would only be meaningful if both parties genuinely commit to peace—not just in words, but in action.

“Thailand did not start this. But Cambodia’s attacks on children, civilians, and non-military targets like hospitals are inexcusable. Such acts are unacceptable under any standard of international law,” he said.

“If Cambodia refuses to stop, then Thailand cannot stop either,” Kriengkrai concluded. “It is our duty—as government, military, and citizens—to protect Thai sovereignty and the lives of our people.”

Thai private sector backs troops

FTI has expressed its full support for Thai troops, security agencies, and civilians amid ongoing border clashes with Cambodia, while urging the United States to increase pressure on Phnom Penh to halt its military aggression.

Kriengkrai extended moral support to soldiers stationed along the frontline, as well as to those who have been injured, killed, or displaced by the violence. “We call on everyone to stand firm in their duties to defend Thailand’s sovereignty,” he said.

Uncertainty looms over US-Thai tariff deal

Kriengkrai acknowledged that the ongoing conflict and uncertainty surrounding Cambodia’s ceasefire commitment have cast doubt on whether the United States and Thailand can conclude their tariff negotiations before the August 1 deadline. “It is difficult to predict,” he said. “Everything now depends on the decisions made by the US and whether the parties, especially Cambodia, follow President Trump’s recommendations.”

Local residents near the border reported hearing explosions and gunfire again in the early hours of July 27, despite earlier ceasefire pledges made to Washington.

Trump wields trade deal as leverage to halt conflict

President Donald Trump took to Truth Social late on Saturday night (26 July) to announce he had spoken to both Hun Manet and Phumtham, linking continued trade negotiations to an immediate ceasefire.

In his first post at 10.28pm Thai time, Trump wrote:

“Just spoke with the Prime Minister of Cambodia about stopping the war with Thailand. Now calling the Acting Prime Minister of Thailand to request a ceasefire. Coincidentally, we are in the middle of negotiating trade deals with both countries—but we won’t move forward if they continue fighting. I’ve made this clear to both sides. Many have already died in this war. It reminds me of the India-Pakistan conflict that eventually ended peacefully.”

At 10.49pm, Trump posted a second message:

“Just spoke with the Acting Prime Minister of Thailand. It was a very good conversation. Like Cambodia, Thailand wants a ceasefire and peace immediately. I will now pass this message back to the Cambodian side. Ceasefire, peace, and prosperity all seem like natural outcomes. We’ll know soon enough.”

By 11.23pm, Trump posted a third update:

“Had a very pleasant call with the Cambodian Prime Minister and informed him of my discussion with Thailand. Both sides want an immediate ceasefire and peace. They also want to return to the ‘trade negotiation table’ with the United States. However, I told them it would be inappropriate to continue until the fighting ends. Both parties agreed to meet and reach a swift ceasefire deal. It’s an honour to work with them. Once peace is restored, I look forward to concluding our trade agreements.”

Academic: Cambodia values US trade over China ties

Assoc Prof Wasana Wongsurawat, a China expert from Chulalongkorn University, released a YouTube lecture analysing Trump’s diplomatic intervention. She noted that Trump had effectively used trade negotiations as a bargaining chip to de-escalate the conflict, suggesting that even Cambodia—which has close military ties with China—was not willing to jeopardise its relationship with the United States.

She pointed out that while Thailand’s Phumtham was previously involved in the controversial deportation of Uyghurs to China, Trump appeared unconcerned, focusing instead on immediate regional stability.

Responding to Phumtham’s social media post stating he had also spoken with China and ASEAN, Wasana said the message likely did not imply direct talks with Chinese President Xi Jinping. “Phumtham wanted to stress that multiple actors, including ASEAN and China, are engaged—not just Trump alone,” she said.

As to concerns that China may support Cambodia militarily, she said that was unlikely. “This year marks the 50th anniversary of Thai-Chinese diplomatic relations. China has assured Thailand it will not supply weapons to harm Thai civilians,” she added, citing a recent statement by a Chinese military attaché.