Thailand requests US to cap reciprocal tariff at 10%, says Finance Ministry

If no agreement is reached or the timeline is not extended, the US will impose tariffs at the rates it has set. For Thailand, this means tariffs could rise to 36%.

Finance Minister Pichai Chunhavajira said the United States has agreed to hold talks with Thailand this week. He plans to travel to the US as head of the Thai negotiation team.

The Finance Minister noted that the negotiation landscape has been continuously changing over recent months due to the United States assigning negotiators at various levels, including the Department of Commerce, United States Trade Representative (USTR), and even the Secretary of the Treasury.

"The Thai government is ready to face any approaches the US may take, which is why it is crucial to have parallel collaboration between the Fiscal Policy Office (FPO) and the Department of Trade Negotiations (DTN) to ensure that the negotiations cover all levels and do not put Thailand at a disadvantage," he said.

As for the hiring of a consultancy or lobbying firm to assist in negotiations on reciprocal tariffs with the United States, Pichai acknowledged that the usual fee for hiring a consultancy or lobbying firm in the US is between US$20,000 and $300,000 per month. 

However, he noted that in special situations, such as "reciprocal tariff" negotiations, firms with specialised expertise and strong policy connections with US government officials can command higher fees.

This is particularly true when the work is urgent, involves competition with other countries, and is linked to Thailand’s trade and export value, amounting to billions of baht annually. 

He said that such an investment is considered worthwhile, given the potential damage that could arise.

"I would like to confirm that this process is transparent and verifiable, as the US has strict regulations on hiring consulting firms under the Foreign Agents Registration Act (FARA), which mandates that all foreign-related contracts must be disclosed on the US Department of Justice’s website," Pichai said.

"If we don’t have the right support, the right team that understands the US, and the proper tools, Thailand may lose market access, face export setbacks, and our farmers and businesses could suffer greatly."

US initial offer: 18% tariff with conditions

A Finance Ministry source revealed that Pichai will travel to the US as head of the Thai negotiation team and is scheduled to meet with Scott Bessent, Secretary of the Treasury, as well as other key US agencies.

The breakthrough in scheduling formal negotiations was due to ongoing technical-level discussions between Thai and US working groups, held via online channels.

Thailand’s team, led by Commerce Ministry Permanent Secretary Vuttikrai Leewiraphan, has already conducted preliminary discussions with the Office of the United States Trade Representative (USTR).

In addition, Thailand has submitted a formal proposal for consideration and enlisted the services of a lobbying firm, which helped facilitate key appointments and accelerate talks ahead of the looming deadline.

According to the same source, the US has responded with an initial proposal suggesting an increase in tariffs on Thai goods from the current 10% to 18%. While this is lower than the default 36%, the US proposal also includes several non-tariff conditions.

Despite the reduced rate, the Thai negotiating team has requested further talks, aiming to lower the rate to 10%—in line with the general tariff level applied to other countries.

The source added that, given the substance and attractiveness of Thailand’s proposal, there is a strong possibility the US may agree to extend the negotiation window beyond the July 7 deadline to allow for further discussion of the details.

Pichai leads Thai delegation to US tonight

Finance Minister Pichai Chunhavajira has confirmed that the ongoing tax negotiations between Thailand and the United States are a pressing concern and have now reached a critical stage. He is scheduled to depart for the US tonight for two days of further talks.

However, he clarified that the talks are not newly initiated. “These discussions have been ongoing for quite some time, both formally and informally. Several proposals have already been submitted. This trip aims to tie up the remaining loose ends,” Pichai said.

He emphasised that Thailand’s approach to the negotiations prioritises national interests, while also considering the constraints of the US side. The goal, he said, is to achieve a “win-win” outcome that reflects the needs of both countries.

Beyond the tariff issue, the discussions will also address non-tariff barriers such as regulations, rules, and trade-related inconveniences. Pichai said the talks present a valuable opportunity for Thailand to review and refine its own regulatory framework to enhance import and export flexibility.

“The USTR has been engaging with many countries, but it’s still unclear how far those talks have progressed. No country has yet finalised an agreement, despite various rumours. I believe, ultimately, we’re likely to see a delay in the enforcement of the new tariff rates,” he added.

Regarding speculation that Thailand may face reciprocal tariffs as high as 18%, Pichai said this figure is merely an estimate by economists for GDP projection purposes. “No one knows the exact figure the US will impose on Thai goods—it could well be lower than 18%,” he said.

Pichai reiterated Thailand’s key position: “Whatever rate the US decides on, all we ask is not to be treated more harshly than others. It’s crucial to preserve our competitive edge. I believe other countries feel the same.”

“If Thailand cannot maintain its competitiveness, the consequences will be endless,” he warned. “That said, ASEAN countries are prohibited from negotiating as a bloc, and so far, no single country has been able to reach a swift resolution. Once you get into the details, new information and conditions always emerge,” Pichai concluded.