US flags Thai solar exports for origin fraud, Finance Ministry tightens checks

The aim is to ensure compliance with a new trade agreement between Thailand and the United States on non-tariff barriers, following their recent deal to impose a 19% reciprocal import tariff.

Julapun added that the tariff agreement, approved by the Thai Cabinet on August 1, will next be submitted to Parliament. He expressed confidence that it would pass smoothly.

“Circumvention of origin rules is a serious violation, and we already have strict controls in place. But under this deal, we need to intensify those efforts even further,” Julapun said.

When asked whether the tariff deal would affect state revenue, Julapun said the matter should not be viewed in isolation. He argued that while tariffs might increase, trade volumes are also expected to grow as a result of improved bilateral relations.

Finance Ministry Permanent Secretary Lavaron Sangsnit said further talks with the US will be needed to determine the regional value content (RVC) threshold, which is expected to be set at around 50%. 

The percentage can include content from Thailand’s trade partners but excludes Chinese-origin components, as the US has not yet reached a tariff agreement with China.

Teerat Attanavanich, Director-General of the Customs Department, said the government is tightening enforcement against transshipment and misdeclaration of origin. Past shortcomings in monitoring arose due to a focus on facilitating trade to attract investment.

He added that the common benchmark for local content in trade negotiations is generally no less than 40%, and regional value—such as input from ASEAN supply chains—may also be included.

However, Teerat noted that such criteria can be flexible, depending on bilateral negotiations, and serve as a foundation for qualifying under preferential trade schemes.

Regarding the US deal, Teerat said Washington has submitted a list of high-risk products suspected of origin circumvention to Thailand via the Department of Foreign Trade. 

Thai authorities are now tasked with monitoring and verifying that these products are genuinely manufactured or assembled in Thailand, and that they meet the agreed content requirements.

One item under close scrutiny is solar panels. The US suspects that some shipments may contain Chinese components minimally processed in Thailand before re-export.

The issue of origin is a top concern for the US. Thailand must provide a clear timeline to address this, Teerat said, adding that a formal trade agreement has yet to be signed, but key details—including timelines—will be outlined in that document.

He stressed that this special arrangement applies exclusively to the US and should not be extended to other countries. Any future free trade agreements with other partners should follow the universal principles of the World Trade Organisation (WTO), he said.