Thailand's working team seeks to ease impact of US tariff hike

Thailand is working to mitigate the impact of the US tariff hike, as the US announced reciprocal tariff on Wednesday, based on trade partners’ tariffs imposed on US goods.

Vuttikrai Leewiraphan, Permanent Secretary of the Commerce Ministry, who chairs the working team on US economic policies, stated that the US tax hike will affect global trade. The US is Thailand’s largest export market, he noted.

He pointed out that Thailand previously faced a US 25% tariff hike on steel and aluminium, which took effect on March 12, 2025, as well as a 25% tariff on automobiles and components introduced on Thursday.

Recently, Thailand faced a reciprocal tariff of 36% due to its 72% tariff charge on US goods.

He warned that two to three product categories, including semiconductors, pharmaceuticals, and forest products, are at risk of further reciprocal tariffs, as Thailand imposes an 11% higher tariff on US industrial and agricultural goods. Additionally, he mentioned that rice, processed shrimp, tyres and car components would also be affected.

The US tariff hike could lead to losses of up to US$8 billion (275 billion baht), he said.

Vuttikrai stated that the working team is in contact with the US Trade Representative (USTR) and is ready to visit once the USTR is prepared for discussions.

The working team will propose a reduction in import tariffs on US goods and an increase in the import volume of US agricultural products to help address the US trade deficit. These products include animal feed, maize, soybeans, meat, alcoholic beverages, and aircraft.

He also said the team would encourage Thai Airways International to lease or purchase aircraft from the US. Regarding energy, PTT has been appointed to import crude oil, petrochemicals, natural gas and liquefied natural gas from the US.

However, he does not expect the plan to increase US goods imports to reduce the US trade deficit, which currently stands at up to US$40 billion (1.37 trillion baht).

“Therefore, we must do more than just trade; we need to focus on investment, alliances, and creating trade stability to reduce the deficit,” he said.

He also mentioned that the working team has planned to encourage Thai entrepreneurs to invest in the US to create jobs there, focusing on states prioritised by US President Donald Trump.

Currently, 70 Thai investment companies operate in 20 US states, creating approximately 11,000 jobs.

Regarding US concerns over production base relocations to Thailand for rerouting exports, he said the Commerce Ministry will address the issue. The Department of Foreign Trade has identified 49 products at risk of being rerouted, particularly steel and products originating from China.

The working team has engaged with government agencies to reduce Thailand’s non-tariff trade barriers, a key concern for the US, he said.

Vuttikrai affirmed that Thailand is preparing to manage the impact of the US tariff hike and implement measures to support affected businesses, including urgent financial assistance for SMEs, such as reduced interest rates and easier access to funding.

In the long term, he stressed the importance of expediting Free Trade Agreement (FTA) negotiations. He noted that the Thailand-European Union FTA is set to be completed in 2025, which could help offset the impact of the US tariff hike.

“The working team is prepared to negotiate and mitigate the impact of additional tariffs while maintaining relations with the US and protecting Thailand’s interests,” he said.

He added that the negotiation plan has been submitted to the Prime Minister for consideration.

(2025/04/03-00:00)