Thai Industry Cheers Tariff Cut, Urges Skills Boost and Market Diversification
Federation of Thai Industries applauds government for securing 19% US reciprocal duty, calls for enhanced competitiveness and new trade links
- The Federation of Thai Industries (FTI) praised the Thai government for successfully negotiating a reciprocal US tariff rate down to a competitive 19%.
- Despite this success, the FTI urged the government to implement programs to upskill Thai entrepreneurs, focusing on improving production efficiency and reducing costs.
- The industry body also called for a strategy to diversify risk by developing new trade networks and expanding into markets beyond the United States.
- The successful tariff negotiation was attributed to close collaboration between the government's "Team Thailand" and the private sector, which provided crucial data.
The Federation of Thai Industries (FTI) has congratulated the Thai government on successfully negotiating a 19% reciprocal tariff rate with the United States.
However, the industry body simultaneously urged the government to press ahead with programmes to upskill Thai entrepreneurs and develop new markets and trade networks.
The FTI’s statement, released on Friday, came in the wake of US President Donald Trump’s executive order approving new tariffs for dozens of countries, with rates ranging from 10% to 41%.
Thailand's success in negotiating its import tariff rate down to 19% places it on a level footing with Cambodia, Malaysia, Indonesia, and the Philippines, making it a competitive rate compared to its regional neighbours.
Countries facing higher tariffs include Myanmar and Laos at 40%, Brunei at 25%, and Vietnam at 20%, while Singapore falls into the lowest tier at 10%.
FTI Chairman Kriengkrai Theinnukul stated that while new import tariffs are an unavoidable reality in the current global political and economic landscape, Thailand's achievement in negotiating the rate down from 36% to 19% reflects close cooperation between the public and private sectors.
He highlighted that the comprehensive feedback provided by the Thai private sector regarding potential impacts, coupled with the proactive work of the "Team Thailand" trade negotiation team, enabled Thailand to safeguard its trade interests.
This success is viewed as positive news amidst current challenges and an opportunity for Thai businesses to adapt and enhance their sustainable competitiveness.
"This tariff rate is considered acceptable; no one is excessively advantaged or disadvantaged. Overall, Thai products remain competitive, but goods with low profit margins, under 10%, will need to reduce costs, improve production efficiency, and engage in dialogue with trade partners to avoid passing the burden onto consumers. Businesses will need to continue their homework on this. Products with already high margins may not be significantly affected," Kriengkrai said.
"I extend my congratulations to Thailand and commend Team Thailand, led by Deputy Prime Minister and Minister of Finance Pichai Chunhavajira, and the diligent team from the Ministry of Commerce, as well as the private sector, who collaboratively provided data. This collective effort led to the success of these negotiations, which will help build confidence and boost morale among both Thai and foreign entrepreneurs," he added.
Data from the Board of Investment (BOI) indicates that investment promotion applications in the first half of 2025 continued to grow despite global uncertainties, reaching a value exceeding 1 trillion baht across more than 1,880 projects.
Both Thai and foreign investors are pressing ahead with expansion, particularly in the digital, electronics, and smart appliance industries, reflecting Thailand's sustained potential as a robust investment hub in the region.
Given the 19% tariff rate, it is anticipated that the positive investment trend from the first half will continue into the second.
Kriengkrai further elaborated that despite the new tariff rate, the US remains a key export market for Thailand, especially for significant industrial products such as processed foods, agricultural goods, automotive parts, electrical appliances, electronic devices, textiles, gems, steel, and aluminium.
Therefore, the FTI will continue its proactive work, focusing on three main approaches:
Collaborating with the Government on Policy Measures: This includes facilitating domestic tax measures, supporting businesses' access to working capital during periods of increased export costs, and advocating for additional trade negotiations to maintain and expand tariff benefits in other markets.
Enhancing Thai Entrepreneurial Potential: This involves providing knowledge, innovation, and advanced technology to businesses to develop and improve production processes, reduce costs, increase production efficiency, and foster higher value-added products.
Expanding New Markets and Trade Networks: This will be achieved by forging trade partnerships in new markets beyond the US to diversify risk and foster long-term economic sustainability.
"The FTI will closely monitor this situation, working collaboratively with all industrial groups to build investor confidence and open doors to economic growth, revenue, and new opportunities for Thailand. We are confident that the Thai industrial sector will continue to stand strong in the global market," Kriengkrai concluded.
