Thailand submits final tariff proposal, expects 19% rate in line with ASEAN countries

Trade negotiations between Thailand and the United States, set to reach their deadline on August 1, 2025, are being closely followed by both the Thai government and private sectors. After submitting its final proposal last week, Thailand is now in the final stages of refining the details.

Several ASEAN countries, including Vietnam, Indonesia, and the Philippines, have already concluded their negotiations, with agreed tariff rates of 20%, 19%, and 19% respectively. Many in Thailand expect the final rate for the country to be similar, around 19-20%.

Sources from the Thai Government House have revealed that after Thailand and Cambodia agreed to a ceasefire on July 28, US President Donald Trump expressed satisfaction with the progress and instructed relevant US agencies to continue tariff negotiations with Thailand.

On the evening of July 29, Team Thailand met with the US Trade Representative (USTR), with the US providing a final draft of the tariff document for Thailand to review. Thailand has since made minor revisions and sent it back to the US. This marks the final step before President Trump officially announces the tariff rate.

"They sent us the final draft for review, and we made a few small changes before sending it back to the US. From here on, there will be no further revisions on Thailand’s side. This is the final stage before President Trump announces the tariff rate, which we expect to know within the next 1-2 days," said the source.

Expected tariff close to regional averages

Commerce Minister Jatuporn Buruspat confirmed that negotiations would continue, despite Cambodia violating the ceasefire agreement. He added that the talks were not about borders or sovereignty but solely focused on trade. Thailand remains committed to its position, prioritising the welfare of the people and farmers.

Thailand has already submitted its final proposal following a US offer to make additional concessions, but these were unrelated to national security and focused on minor details. Jatuporn expressed confidence that the negotiations would conclude before the August 1 deadline.

"It’s hard to predict exactly what the tariff rate will be, but the US is looking at it regionally, so we believe it will be in line with other countries in the region. The Ministry of Commerce fully supports the information provided," said Jatuporn.

FTI anticipates 19-20% tariff rate from Trump trade talks

Kriengkrai Thiennukul, Chairman of the Federation of Thai Industries (FTI), said that trade negotiations with the United States are progressing positively, as the government has indicated that a resolution will be reached before the August 1 deadline. He also stated that a tariff rate near that of regional competitors would be a positive sign, following the US president's key role as a mediator in the ongoing Thai-Cambodian border conflict.

Thailand adhered to the ceasefire agreement at 00:00 on July 29, but Cambodia continued its attacks until the following morning. This, according to Kriengkrai, demonstrated Thailand's sincerity in following the agreement, which he believes will have a favourable impact on the upcoming tariff negotiations.

FTI is hopeful that the negotiations will yield a positive outcome, with Thailand expected to receive a tariff rate between 19-20%, in line with or similar to key regional competitors such as Vietnam (20%), Indonesia (19%), the Philippines (19%), and Malaysia (25%). Kriengkrai also hopes that President Trump will reward Thailand’s trustworthiness by setting a tariff rate lower than its neighbouring countries.

“Thailand has demonstrated its reliability and strict adherence to agreements, and we hope not to face a high tariff rate of 36%. I believe this trustworthiness will strengthen our bargaining position, unlike Cambodia, which has not followed the agreement, and the US may take this into consideration,” he said.

The private sector is closely monitoring the outcome of the negotiations. If the result is favourable and Thailand’s tariff rate is lower than expected, at 15%, it will significantly benefit Thailand’s exports. However, if the tariff rate remains as high as 36% without reductions, it could lead to losses of 800-900 billion baht. In that case, the government would need to implement urgent economic stimulus measures and provide packages to support heavily impacted exporters, using appropriate financial assistance.

NESDC predicts tough US tariff negotiations

Supavud Saicheua, Chairman of the National Economic and Social Development Council (NESDC), responded to questions about the ongoing US tariff negotiations, stating that "good news is unlikely." He further expressed uncertainty about whether the deadline of August 1 would be met, adding, "I don't know, but it probably won't be good news. Negotiating with the US, especially with Trump, isn't easy."

Supavud noted that the United States, as one of the largest markets in the world, imposes high import tariffs, with 80% of goods imported to the US currently subject to a 40% tariff. This effectively closes the market to many countries, particularly those like Thailand that rely heavily on exports.

Thailand’s economy is significantly dependent on exports, with the export-to-GDP ratio increasing to 60-70% following the 1997 Asian financial crisis, compared to a global average of 30%. In addition, the Thai baht has appreciated compared to its competitors, while the country’s economic growth remains low. When combined with inflation, the private sector’s sales growth is limited to just 2.1%.

FPO revises Thai GDP growth forecast to 2.2%

Pornchai Thiraveja, Director of the Fiscal Policy Office (FPO) and spokesperson for the Ministry of Finance, revealed that the FPO has revised its 2025 GDP growth forecast for Thailand to 2.2%, up from the previous estimate of 2.1% in April. This aligns with the International Monetary Fund (IMF) revision of Thailand’s economic outlook from 1.8% to 2%. The IMF also forecasts global economic growth at 3% for the year.

Thailand is expected to benefit from reduced import tariffs, with reciprocal tariffs ranging from 15-36%. The tariff rate for Thailand will most likely not be 36%, but it is expected to remain above 15%, similar to other ASEAN countries, such as Vietnam and the Philippines, which have already secured tariff reductions from the US.

At the same time, the Ministry of Finance is preparing measures to mitigate the impact on the export sector. A plan to stimulate the economy with 157 billion baht is being implemented, alongside financial measures to support the private sector, particularly SMEs in the export supply chain to the US, through special low-interest loans from state-owned financial institutions. These measures aim to increase liquidity and reduce financial burdens.