Thailand Nears Deal with US to Lower 36% Export Tariff Ahead of August Deadline

Thailand is nearing an agreement with the US to lower a threatened 36% tariff on its exports. Finance Minister Pichai Chunhavajira expects trade talks to conclude within days, with a deal expected to be announced before the new tariff rate takes effect on Aug. 1. Thailand has offered to increase purchases of US goods and invest more in the US to reduce its trade surplus, which stood at $46 billion last year.

Thailand is nearing an agreement with the United States to reduce a threatened 36% tariff on its exports. Finance Minister Pichai Chunhavajira expects trade talks to conclude within days, with a deal expected to be announced before the new tariff rate takes effect on August 1. Thailand has offered to increase purchases of US goods and invest more in the US to reduce its trade surplus, which stood at $46 billion last year [1].

The Thai government has been steadfast in its negotiations, refusing to accept zero per cent tariffs on all US imports to protect its domestic businesses and agricultural sector [1]. Thailand's Deputy Finance Minister Julapun Amornvivat underscored the country's unwavering position, stating that a zero-tariff deal would necessitate broader market liberalization due to Most-Favoured Nation (MFN) principles, which could significantly harm domestic businesses [1].

In a significant move, Thailand is set to propose 0% import duties on tens of thousands of products in a pivotal video conference with the Office of the United States Trade Representative (USTR) [2]. This offer comes amidst contingency planning for potential US tariffs, with the Thai delegation presenting additional proposals designed to strengthen trade ties.

The Thai government has tasked relevant agencies with developing detailed relief plans based on two key hypothetical scenarios regarding potential US tariff impositions: a 36% tariff and a 20% tariff [2]. These contingency plans are reportedly complete and are now awaiting the outcome of tonight's crucial negotiations.

The Indonesian Trade Minister Budi Santoso has expressed optimism about the potential of reduced tariffs with the US to attract significant investment to Indonesia [3]. Indonesia currently faces a 19% reciprocal tariff from the US, which Santoso believes will boost investment and exports.

The Thai government's focus on protecting its domestic businesses and agricultural sector, while also seeking to strengthen trade ties with the US, reflects a strategic approach to navigate the complexities of international trade. The outcome of these negotiations will significantly impact Thailand's trade dynamics and economic landscape.

References:
[1] https://www.nationthailand.com/business/economy/40052871
[2] https://www.nationthailand.com/business/economy/40052629
[3] https://en.tempo.co/amp/2029862/todays-top-3-news-indonesia-trade-minister-upbeat-trump-tariffs-will-boost-investment