US Tariff Deadline Looms for Thailand, Export Fate Hangs in Balance

 

Thailand's economy is on tenterhooks as the July 9 deadline for new US import tariffs fast approaches. 

 

Deputy Prime Minister and Finance Minister Pichai Chunhavajira has been leading "Team Thailand" in urgent negotiations in Washington D.C., attempting to secure a favourable deal as US President Donald Trump prepares to announce new retaliatory tariff rates. 

 

The outcome could significantly impact Thailand's crucial export sector.

 

Despite intense discussions this week, a conclusive agreement with the US remains elusive. Thailand is currently compiling feedback from the US side to refine its proposals, with local media closely tracking developments.

 

Following his return from the US, Pichai confirmed that "Team Thailand" held extensive meetings with various US government policy-makers, private sector investors in Thailand, and even representatives from the US agricultural sector – a key focus for the US administration.

 

"These engagements have given Team Thailand detailed insights," Pichai explained. "It was a formal policy-level encounter, including meetings with the US Trade Ambassador, a senior executive from the US Trade Representative, and the US Deputy Secretary of the Treasury, along with working-level officials. The feedback reaffirms the US's long-standing belief that Thailand is a mutually beneficial economic and trade partner."

 

 

 

Pichai stressed that these discussions provided a deeper understanding of the US's thinking and the views of other stakeholders influencing the US government's decisions. 

 

"We've listened to both proposals and concerns from the US side, which comprehensively covered tariff rates and trade barriers," he said. 
 

 

The Thai team will now take all this feedback to refine their technical-level proposals for a swift submission to the US.

 

"The negotiations concluded positively, with the US thanking Thailand for its proactive engagement," Pichai added. "Thailand will take all proposals back to formulate additional offers for mutual benefit. Our working group's stance is to achieve a sustainable and mutually beneficial agreement. We will work even harder to clarify Thailand's position and demonstrate to the US how this will serve both nations, aiming for a beneficial agreement."

 

 

 

Tariff Projections and Domestic Preparations

Meanwhile, Danucha Pichayanan, Secretary-General of the National Economic and Social Development Council (NESDC), projects that Thailand could face an 18% US tariff. 

 

This forecast is based on the outcomes of tariff negotiations between the US and three other countries: China, the UK, and Vietnam. He noted that any rate below 18% would be more advantageous for Thailand.

 

While Pichai is expected to re-engage with the US before the July 9 deadline, it's unclear if the US will extend the negotiation period. 

 

If Thailand's tariff rate were to exceed Vietnam's 20%, the full economic impact would require a broader assessment, considering rates applied to Malaysia and Indonesia as well.

 

"Should the US maintain its original 36% tariff on Thailand, and other countries face their initially announced rates, Thailand's GDP is expected to grow by 2.3%," Danucha explained. "However, with Vietnam's rate now at 20% (down from 46%), and the outcomes for Malaysia, Indonesia, and Thailand still unknown, we need to re-evaluate our economic figures."
 

 

 

 

Private Sector Concerns Mount Ahead of Trump's Letter

The private sector is increasingly anxious. Kriengkrai Thiennukul, Chairman of the Federation of Thai Industries (FTI), expressed concern that Thailand could be at a trade disadvantage. 

 

He argues that Thailand's target tariff rate must not be worse than Vietnam's, given that many Thai exports to the US, such as computers, apparel, electrical appliances, and processed foods, are similar to those from Vietnam. 

 

"If Thailand still faces 36% while Vietnam pays only 20%, our goods will instantly become more expensive and lose competitiveness," Kriengkrai warned.

"Team Thailand has an immense amount of work ahead, and we offer our full support," he added. "Our current proposals aren't enough, and there's no clear progress yet. With Trump set to send letters notifying over 100 trading partners of retaliatory tariffs next week, Thailand faces the risk of high tariffs if a letter arrives before we clinch a deal with the US."

 

Businesses are also closely watching whether Thailand will be named in the first batch of tariff letters, expected to be announced from Monday onwards. 

 

Being listed before a revised proposal is submitted could mean missing a critical opportunity and facing the full brunt of the tariffs. 

 

Despite some hope for a tariff rate similar to Vietnam's, many question whether the remaining few days are enough to turn the tide before Trump's July 9 deadline.

 

 

 

Finance Ministry Prepares Aid Package

In anticipation of potential impacts, Deputy Finance Minister Julapun Amornvivat confirmed that the government has mechanisms in place to assist affected businesses. 

 

From a 157 billion Baht budget, approximately 10 billion Baht is earmarked to help the private sector in the event of a trade war, aiming to safeguard employment and stabilise businesses.

 

"While negotiations may not reach a 100% conclusion, we have full confidence in our potential and expect to achieve our goal of reducing the import tariff rate from the original 36% to 10%," Julapun stated.

"I don't want to jump to conclusions, regardless of the tariff proportion," he added. "There will be an impact, and we must have measures ready to help."

 

All eyes will be on Washington D.C. in the coming days as the July 9 deadline looms. Thailand's final proposal will prove decisive in determining the fate of its exports.