Thailand Rejects US Tariff Threat; Bangkok Vows Trade Defense
Thailand is proactively working to mitigate the risk of US tariffs amid growing concerns over its substantial trade surplus with the United States. Commerce Minister Pichai Naripthaphan addressed these concerns on Friday, assuring the public that the government is prepared to negotiate and adapt to US requests to avert a trade conflict. His statement followed a recent trip to the United States for discussions with officials, a visit he characterized as «quite fruitful.»
While Mr. Pichai declined to divulge specifics of Thailand’s negotiating strategy, he emphasized the existence of a concrete plan. He urged the public not to be unduly alarmed, stating, «We already have a plan, but we can’t reveal it yet because if we reveal it too much, it will be a problem in negotiations.» This measured approach underscores the delicate balance Thailand must strike in addressing US concerns without compromising its own economic interests.
The potential for tariffs stems from US President Donald Trump’s recent trade memorandum, mandating a comprehensive review of various trade issues, including persistent US trade deficits. This review, due by April 1st, has put several countries with trade surpluses with the US, including Thailand, on high alert. Experts speculate that the Trump administration might invoke a rarely used 1930 trade law to justify reciprocal tariffs, mirroring other nations' import taxes.
Thailand’s trade surplus with the US reached a significant $35.4 billion in 2024, with the US absorbing 18.3% of Thailand’s total exports, valued at $54.96 billion. This makes the US Thailand’s largest export market, highlighting the crucial role this trade relationship plays in the Thai economy. Acknowledging the imbalance, Thailand has already proposed measures to reduce the gap, including plans to import 1 million tonnes of ethane from the US in the second quarter of this year. This proactive approach demonstrates Thailand’s commitment to finding mutually beneficial solutions.
Beyond addressing the trade imbalance, Mr. Pichai highlighted the long-standing positive relationship between the two nations. He pointed out a unique trade advantage the US enjoys in Thailand: US investors are the sole foreign entities permitted full ownership—a 100% stake—in certain Thai businesses. While sectors like banking and telecommunications are excluded from this arrangement, it represents a significant incentive for US investment in Thailand and underscores the deep economic ties between the two countries.
The issue of potential US tariffs has reached the highest levels of the Thai government. Earlier this week, Prime Minister Paetongtarn Shinawatra commissioned a study to assess the potential impact of evolving US trade policies on Thai exports, recognizing the pivotal role exports play in driving the Thai economy. This move reflects the seriousness with which the government is taking the potential threat and its proactive approach to managing the situation.
As Thailand navigates these complex trade negotiations, the focus remains on maintaining a strong relationship with the US while safeguarding its own economic interests. The coming months will be crucial as the US trade review unfolds and Thailand continues its efforts to mitigate the risk of potentially damaging tariffs. The ultimate outcome will significantly impact the future of US-Thai trade relations and the broader economic landscape of Southeast Asia.
