Thailand Automakers Convene Amid 37% US Tariff Crisis
Thai manufacturers are preparing for the impact of new US tariffs and will hold an urgent meeting on Friday, April 4th, under the auspices of the Federation of Thai Industries (FTI). The meeting will focus on strategies to mitigate the 37% reciprocal tariffs announced by the White House on Thai exports, effective April 9th. One potential mitigation strategy is increasing purchases of American products to address the trade imbalance cited by the US as the reason for the tariffs. According to the White House, the new policy aims to rectify “a persistent trade deficit driven by the absence of reciprocity in our trade relationships,” as reported by the Bangkok Post. This has caused widespread concern among Thai industries reliant on US markets, particularly the struggling automotive sector.
The impending tariffs exceeded industry expectations. “The 37% tariff is higher than the FTI’s estimate of 10–15%,” stated Kriengkrai Thiennukul, FTI chairman, highlighting the potential impact. The FTI recognizes the need for broad discussions among exporters, acknowledging the potential effects on numerous sectors and international trade relationships. These tariffs follow a separate 25% tariff on foreign cars shipped to the US, effective April 3rd, further challenging the Thai automotive industry. As reported by this link, these tariffs are causing significant apprehension among Thai manufacturers.
The Thai automotive industry is already experiencing a downturn in exports and domestic sales. Data from the FTI’s Automotive Industry Club shows an 18.1% year-on-year decline in vehicle exports during the first two months of 2025, totaling 143,644 units. Domestic sales slumped by 9.53% to 97,395 vehicles during the same period. While high household debt contributed to the domestic slowdown, the export decrease is attributed to multiple factors, including Washington’s trade policies. According to the FTI’s Automotive Industry Club, these policies have caused Thailand’s trading partners to hesitate in purchasing combustion engine vehicles, awaiting clarity on the Trump administration’s tariff strategy.
Suwat Supakandechakul, President of the Thai Automotive Industry Association, urged the government to support the automotive sector and other affected industries. Mr. Suwat was unsurprised by the 37% tariff, citing Thailand’s significant trade surplus with the US. Mr. Suwat estimated this surplus at over US$35 billion (B1.2 trillion) in 2024, placing Thailand 11th globally in terms of trade surplus with the US. The Office of the US Trade Representative, however, reported a higher figure of US$45 billion for the same period.
US firms producing electronics, especially hard disk drives, and exporting them back to their countries are one factor behind this trade surplus.
This observation from Mr. Kriengkrai highlights the complexity of the trade relationship. One potential solution involves shifting import patterns. An anonymous executive at PTT Group suggested reducing imports from certain countries to increase purchases of US goods. This could involve sourcing liquefied natural gas (LNG) and aircraft from the US, instead of traditional Middle Eastern suppliers.
What does this mean for the average consumer? Increased purchases of US goods could affect pricing and availability of certain products in Thailand. The impact on the automotive industry could also have cascading effects on related industries and employment. The upcoming FTI meeting shows Thailand’s proactive approach. The meeting’s outcome and subsequent US negotiations will be crucial in determining the long-term implications of these new tariffs. The future of the Thailand-US trade relationship remains uncertain, dependent on these discussions and negotiations.
