Shippers’ council urges govt to negotiate lower US Tariffs

The Thai National Shippers' Council (TNSC) has urged the government to accelerate negotiations with the US administration to secure a reduction in import tariffs, aiming to lower the tariff rate from 36% to at least 20% within the next three weeks.

Urgent Action Needed to Protect Thai Exports and Economy

The TNSC warned that if the government fails to convince Washington to lower the import tariffs on Thai goods, Thailand’s exports and economy will face severe consequences. The council stated that it would take between five to ten years for the economy to recover if the tariffs remain at 36%.

US President Donald Trump informed the Thai government in a letter that starting August 1, Thailand would face a 36% tariff on its exports to the US.

Impact on Thai Exports and Competitiveness

Thanakorn Kasetsuwan, president of the TNSC, expressed concern that the 36% tariff is much higher than expected, especially when Vietnam and Malaysia have successfully negotiated lower rates of 20% and 25% respectively. Thanakorn emphasized that if the tariffs remain high, Thai exports will become uncompetitive, particularly affecting exports worth 2 trillion baht, which represent 20% of Thailand’s total export value.

He identified several key sectors at risk, including electric appliances, processed foods, rice, rubber products, and other consumer goods. Many of these industries are labor-intensive, meaning reduced exports could lead to mass layoffs.

Agricultural and Manufacturing Sectors at Risk

Thanakorn also pointed out that Thai agricultural products will struggle to compete in the US market, which could lead to falling domestic prices and a significant impact on Thai farmers.

Additionally, the manufacturing sector would face challenges, with foreign investors potentially relocating their production bases away from Thailand due to uncompetitive export rates.

Projected Economic Downturn

The new 36% tariff would cause Thai exports to decline significantly in the second half of the year. The overall growth of Thailand's exports would fall to just 1%, compared to the 3% growth originally projected for the year.

TNSC Calls for Immediate Government Action

Kongrit Chantrik, executive director of the TNSC, reiterated that negotiating a reduction to 20% is crucial. Failure to do so could result in long-term damage to Thailand’s economy, with a potential impact lasting at least five to ten years.

The TNSC proposed the following measures to the Thai government:

• Reduce import tariffs on US products to 0% for as many items as possible.
• Seek alternative export markets to diversify Thailand’s trade partners.
• Implement measures to enhance the competitiveness of Thai exporters and protect local businesses from an influx of cheap imported goods.
• Delay increases in minimum wages and reduce manufacturing costs to ease pressure on industries.