Pichai Optimistic on US Tariff Talks, Expects 'Win-Win' 20% Rate
Thailand's Finance Minister believes a new proposal will secure a favourable trade deal, likely reducing US tariffs to a regional average of 20%
- Thai Finance Minister Pichai Chunhavajira is optimistic about US tariff negotiations, describing the talks as positive and anticipating a "Win-Win" outcome for both countries.
- Pichai expects the final reciprocal tariff rate to be approximately 20%, a significant reduction from the initial 36%, with an announcement expected before August 1st.
Thailand's Deputy Prime Minister and Minister of Finance Pichai Chunhavajira expressed optimism on Friday regarding ongoing reciprocal tariff negotiations with the United States.
He stated that discussions with the Office of the United States Trade Representative (USTR) yesterday evening were "good," taking the full 30 minutes as planned.
Pichai explained that the talks focused on clear issues, with Thailand presenting detailed proposals concerning customs duties, transhipment of goods, increased purchases of US products, and greater Thai investment in the US.
The Thai side also highlighted efforts to enhance its operational efficiency. Crucially, the US indicated that Thailand's revised offer showed "Very Substantial Improvement."
Pichai maintained that Thailand's proposal rests on sound principles. However, he acknowledged that opening markets to US goods means Thailand must also adopt a proactive approach.
If Thailand boosts imports to balance trade with the US, its economy must simultaneously expand, enabling it to increase exports to other global markets.
He noted that while reducing import barriers for certain US goods might be minor in value, it could impact domestic agriculture, industry, and the SME supply chain. The government, he assured, is committed to supporting these sectors and will urgently assist them through this transition.
"The most crucial point is to build Thailand's competitiveness," Pichai asserted. "When Thai products are efficient, cost-effective, and high-quality, we can then compete with anyone worldwide."
Pichai affirmed that Thailand's proposal best meets US objectives without forcing Thailand to "unwillingly accept" terms. He acknowledged that Thailand would open its market more broadly to the US and plans further initiatives, viewing the anticipated outcome as a "Win-Win" for both nations.
The Finance Minister added that he expects the final reciprocal tariff rate imposed on Thailand will align closely with other countries in the region, likely settling at approximately 20%.
He understands that senior US officials will be briefed on the negotiation details on Friday. It is anticipated that a new tariff rate will be announced before the US begins collecting tariffs on Thai goods on 1 August, significantly reducing it from the initially set 36%.
Regarding tariffs on transhipment goods, Pichai stated that specific conditions for these products would be discussed further. The US is expected to consider varying rates across different sectors, which will require continued monitoring.
