Thailand Hit with Steep US Tariffs as Trump Escalates Trade Stance

Washington's latest move imposes a 36% levy on Thai imports, with President Trump explicitly warning against retaliation and urging Thailand to open its markets further.

 

Thailand is set to face a significant economic challenge as US President Donald Trump announced a substantial 36 per cent tariff on imports from the Southeast Asian nation.


The new levy, which comes into effect on 1st August, is part of a broader, assertive strategy by Washington to correct what it deems as "trade imbalances" with various global partners.


In a letter posted on his Truth Social platform on Monday, 7th July, President Trump directly addressed Thailand's situation.


He specified that the 36% reciprocal tariff would apply to "all types of Thai goods, separate from any existing sectoral tariffs," and would also be levied on goods transshipped through Thailand to evade higher duties.


Trump's letter urged understanding, stating that "this tariff rate is far less than what Thailand needs to eliminate its significant trade imbalance."


He further incentivised local production, noting, "no tariffs will be collected if Thailand, or Thai companies, decide to build or produce goods within the United States of America."


The US President reaffirmed his desire for continued trade with Thailand, but insisted it must be "balanced and fair."

He invited Thailand to "join the special economy of the United States, currently the world's number one market," acknowledging that the US has been negotiating trade with Thailand for many years due to persistent imbalance issues.

 

A clear warning accompanied the tariff announcement: "should Thailand decide to raise its own tariffs in retaliation, for any reason, the US would impose additional tariffs on top of the already announced 36%."

Trump underscored his rationale, stating that the trade deficit poses "a major threat to our Economy and, indeed, our National Security!"


However, the letter also offered a potential pathway for adjustment. Trump indicated that if Thailand were to "open its heretofore closed Trading Markets to the United States, and eliminate its Tariff, and Non Tariff, Policies and Trade Barriers, we will, perhaps, consider an adjustment to this letter," with the final rates depending on the overall relationship. He concluded with the assurance, "You will never be disappointed with The United States of America."


Thailand is not alone in facing these heightened duties. The 36 per cent tariff also applies to Cambodia, while Myanmar and Laos will see the highest rate at 40 per cent.

Other nations targeted include South Korea and Japan, both facing a 25 per cent tariff, alongside Malaysia (25%), Tunisia (25%), Kazakhstan (25%), Indonesia (32%), South Africa (30%), Bosnia and Herzegovina (30%), Bangladesh (35%), and Serbia (35%).

Notably, there are clear differences from the retaliatory tariff rates initially suggested on 2nd April.

For five out of seven economies, the US-imposed rates have seen a reduction: Tunisia from 28% to 25%, Bosnia from 35% to 30%, Serbia from 37% to 35%, Bangladesh from 37% to 35%, and Cambodia from 49% to 36%.

However, Thailand and Indonesia have seen no change, remaining at 36% and 32% respectively.


This latest move marks a clear departure from traditional diplomatic trade negotiations, with President Trump opting for a direct, unilateral approach.

The letters posted on Truth Social reflect rates determined by the US President himself, rather than mutually agreed outcomes, suggesting that recent behind-the-scenes discussions with foreign delegations failed to yield satisfactory resolutions.

White House Press Secretary Karoline Leavitt stated that Trump is "creating tailor-made trade plans for each and every country."


The tariffs are set to be imposed just two days after the expiry of a 90-day suspension period that was initially announced in April.

That earlier proposal had included a base 10 per cent tariff on most imports, with the potential for increases up to 70 per cent for specific countries.


The financial markets have reacted with apprehension to Trump's announcement.


Following the news of the 25 per cent tariffs on South Korean and Japanese imports, key indices on Wall Street experienced a notable slump, with the Dow Jones, S&P 500, and Nasdaq Composite all registering declines.


Meanwhile, the Associated Press reported that the US still has unresolved trade differences with other significant partners, including the European Union and India.


Tougher negotiations with China, where imports are already subject to a 55 per cent tax, are anticipated on a longer time horizon.

(2025/07/08-00:00)