Thailand Details Concessions to US for Reduced Import Tariffs
Bangkok agrees to extensive market liberalisation and increased trade in exchange for a cut in reciprocal duties to 19%; denies base deal
- In exchange for the US reducing its tariff on Thai goods from a proposed 36% to 19%, Thailand will eliminate its own tariffs on over 10,000 US import items.
- Thailand will open its market to American companies by reducing non-tariff barriers, such as customs procedures, and offering investment incentives in key sectors like clean energy, technology, and logistics.
- To address the trade imbalance, Thailand has committed to cutting its trade surplus with the US by 70% over five years, partly by purchasing US energy and aircraft and increasing import quotas for American agricultural products.
The Thai government has disclosed the comprehensive list of concessions it made to the United States to successfully negotiate a significant reduction in reciprocal import tariffs.
Bangkok has agreed to a wide array of trade and investment measures, securing a lowered tariff rate of 19% on Thai goods, down from the originally proposed 36%. The new rate is effective from today, August 1, 2025.
According to information compiled by Nation TV, Thailand agreed to ten principal points in exchange for the reduced 19% tariff from the United States:
1) Near-Total Tariff Exemption for US Imports: Thailand has offered to implement zero tariffs on over 10,000 import items from the US (out of approximately 11,000 total items). These are predominantly goods not produced domestically or those produced in insufficient quantities, such as medical instruments, advanced automotive components, and specialised food products.
2) Reduction of Non-Tariff Barriers (NTBs): Thailand has pledged to reduce various obstacles, including sanitary regulations, customs procedures, and certification processes for US goods. This includes adopting a "post-clearance audit" system, which permits goods to clear customs before subsequent inspections, thereby expediting processes and lowering cost burdens for US exporters.
3) Opening Up EEC and Infrastructure Investment to US: Thailand has offered fast-track services and Board of Investment (BOI) incentives to American companies targeting three key sectors: clean energy, semiconductors/ICT, and logistics. This aims to position Thailand as a key investment hub for the US within ASEAN.
4) Procurement of US Energy and Aircraft: Both the Thai public and private sectors are collectively preparing to purchase Liquefied Natural Gas (LNG) from US companies and new Boeing aircraft models. This move is expected to help reduce Thailand's persistent trade surplus with the United States.
5) Commitment to Reduce Trade Surplus by 70% in Five Years: Thailand has put forward a roadmap to cut its substantial trade surplus with the US (currently exceeding 120 billion baht annually) to just 30% by 2030. This will involve increasing imports and rebalancing investment flows.
6) Adoption of New Rules of Origin (RVC): Thailand has agreed to implement less flexible product origin verification systems. This measure is designed to prevent "Chinese goods bypassing via Thailand" and ensure that Thai products are not used as a conduit to evade tariffs.
7) Reduced Digital/Cloud Service Tax for US: Thailand has offered a temporary 5% tax exemption for US digital service companies (such as AWS and Google Cloud) for two years. This aims to encourage greater American technology investment and service provision in Thailand.
8) Expanded Quotas for US Agricultural Imports: Thailand has consented to increase import quotas for US corn, barley, and soybeans. This step is intended to support Thailand's animal feed industry and address demands from the American agricultural sector.
9) Protection for Certain Strategic Goods: While mostly opening up tariffs to 0%, Thailand will retain existing tariffs on key strategic goods. These include essential commodities such as rice, sugar, processed fruits, and products from highly competitive Thai food industries, aiming to safeguard domestic farmers and producers.
10) Adherence to Thai-Cambodian Ceasefire Conditions: Although not formally stipulated in the trade agreement, Thailand's willingness to "reduce border tensions" is widely seen as an underlying factor considered by the US in its decision to lower the reciprocal tariffs.
In summary, Thailand has made extensive, multi-faceted concessions, including broadly opening its market to the US, granting almost complete tariff exemptions, inviting significant investment, increasing imports, and enhancing security cooperation.
In return, the US reciprocal tariff rate on Thai goods has been reduced from 36% to 19%, effective today, August 1, 2025.
Crucially, the agreement pertains exclusively to trade and investment and, as confirmed by official sources, does not include any condition for establishing a US military base in Phang Nga, contrary to earlier rumours.
