Pichai: Thailand to adjust US tariff proposal slightly

Pichai: Thailand to adjust US tariff proposal slightly

Thailand has submitted a revised proposal to the United States in an effort to avoid steep tariffs, Finance Minister Pichai Chunhavajira announced on July 6. The new proposal aims to boost bilateral trade volumes and reduce Thailand's trade surplus with the US by 70% within five years, reaching balance in seven to eight years [2].

Pichai emphasized that the latest proposal is based on the original framework submitted by Thailand and is designed to address specific concerns raised by the US during recent discussions. The proposal includes a request to waive import duties or non-tariff barriers for most goods and gradually remove restrictions on a smaller number of items [2].

Thailand is pushing for a best-case tariff rate of 10% but is open to a range between 10% and 20% as an acceptable alternative. The proposal also includes a commitment to increase imports of natural gas and aircraft from the US, as well as a plan to purchase more American products, particularly liquefied natural gas (LNG) and Boeing aircraft [2].

The move follows Pichai's meeting with US trade representatives last Thursday, during which Thailand and the US discussed tariff issues at the ministerial level. Thailand is among several countries racing to conclude a trade agreement with the US to avoid steep tariff hikes [2].

Thailand faces a significant challenge in its export sector due to the US's 36% tariffs on Thai goods, which take effect from August 1, 2025. This rate is higher than the tariffs agreed by competitors like Vietnam (20%) and Malaysia (25%) [3]. In response, Thailand has presented a second-round proposal to the US, aiming to expedite the trade balance adjustment and achieve a 70% reduction by 2030, with a target to balance trade by 2031-2032 [3].

Thailand's proposal adheres to the framework of the Regional Comprehensive Economic Partnership (RCEP), which covers tariff reductions for around 9,000 items. This ensures Thailand's commitments to its other trading partners remain unaffected. The proposal includes zero tariffs on several categories of agricultural goods, with the goal of reducing Thailand's high MFN tariff rate for agricultural products [3].

Pichai emphasized that Thailand's principle is to have an open discussion about what the US wants and what Thailand wants. He noted that the deal can continue to be improved over time and that Thailand is reviewing the full list of goods imported from the US [1].

Thailand is pushing for a 10% tariff rate from the US, described by Pichai as the most favorable scenario. However, he noted that even a 10–20% rate would be manageable. The worst-case scenario would be ending up with a worse deal than regional neighbors [2].

Lowering US tariffs is seen as critical to shielding Thailand's trade-dependent economy, which is already under pressure from Southeast Asia's highest household debt and sluggish domestic consumption. A favorable trade deal could also help restore investor confidence following recent political turbulence [2].

References:
[1] https://www.nationthailand.com/business/economy/40052238
[2] https://www.thestar.com.my/aseanplus/aseanplus-news/2025/07/07/thailand-to-offer-us-more-trade-concessions-to-avert-36-tariff
[3] https://www.nationthailand.com/business/economy/40052383