Thailand Rejects Claims of Total Market Opening in US Tariff Agreement

 

Thailand's Deputy Prime Minister and Finance Minister Pichai Chunhavajira has firmly rejected suggestions that the kingdom's recent reciprocal tariff agreement with the United States represents wholesale market liberalisation, insisting instead that the deal involves carefully calibrated strategic openings designed to protect domestic industries.

 

Speaking to Thai media at the Finance Ministry on Friday, Pichai emphasised that Thailand has not granted universal zero per cent import liberalisation for American goods, contrary to speculation surrounding the agreement.

 

"Over the past 30-40 years, Thailand has traded with many countries, except the United States," Pichai explained. "As Thailand already maintains a Free Trade Agreement with Australia, we proposed that the US receive equivalent tariff treatment."

 

Under the arrangement, selected US goods entering Thailand will face zero percent tariffs, whilst Thai exports to America will continue to attract 19 percent duties—a level Pichai described as competitive for Thai producers.

 

 

 

Energy and Aviation Priorities

The Finance Minister outlined specific sectors where Thailand will open its market, focusing primarily on essential imports including energy supplies and aircraft. 

 

Thailand has already committed to purchasing one million tonnes of liquefied natural gas (LNG) from the US, with deliveries expected next year to help reduce domestic electricity costs.
 

 

The kingdom also plans to acquire approximately 100 new aircraft over the next five to ten years—the first such purchases since the COVID-19 pandemic—to boost travel capacity and stimulate economic growth.

 

"Thailand faces an energy shortage in both oil and natural gas, with oil imports reaching 90 per cent globally," Pichai stated. "This presents an opportunity to purchase up to 10 per cent from the US."

 

 

 

Agricultural Safeguards Maintained

Addressing concerns about agricultural protection, Pichai assured that strict safeguards would remain in place for Thai farmers. 

 

Pork imports from the US will be limited to less than one per cent of total consumption, with stringent conditions including prohibition of offal imports and mandatory testing for growth-promoting substances.

 

For maize—where domestic production of five million tonnes falls short of 10 million tonnes demand—the government has proposed quota-based imports from the US, conditional on purchasing domestic produce first.

 

"We're opening imports for less than one percent of pork to test the Thai market," Pichai confirmed. "Thousands of items will receive zero percent tariffs from the US, including some not produced by America, ensuring consumers benefit from lower prices without affecting local industries."

 

 

 

Transshipment Crackdown

The Minister acknowledged that addressing "transshipment products"—goods originating from other countries with minimal Thai production content—represents the deal's most challenging aspect.

 

Of Thailand's $50 billion in exports to the US, approximately $20 billion worth of goods are under American suspicion of tariff avoidance.
 

 

Products identified as "phantom goods" will immediately face 40 per cent tariffs, with Thai and US customs departments collaborating closely to verify origins.

 

Exporters shipping goods before 7 August 2025 will incur 10 per cent US import tariffs, whilst shipments from that date onwards will face 19 per cent duties, with suspected phantom products attracting the full 40 per cent penalty.

 

 

Economic Restructuring Opportunity

Pichai positioned the agreement as an opportunity for Thailand to restructure its economy, using targeted market liberalisation to reduce costs and enhance long-term competitiveness whilst maintaining sectoral balance.

 

The Finance Minister expressed optimism about Thailand's GDP growth potential exceeding 2.2 per cent this year, though he cautioned that outcomes would depend on ongoing efforts and changing external factors.

 

Meanwhile, Deputy Prime Minister Phumtham Wechayahai, serving as Acting Prime Minister, has called an urgent meeting of relevant ministers and agencies for 1pm today at Government House, Building 1. Following the discussions, both he and Pichai are expected to address the media in a press conference at Government House's central hall.