Thailand Rushes Trade Talks With US To Avoid 36% Tariff

Thailand is expediting efforts to finalize a trade agreement with the United States ahead of the July 9 deadline, when a 36% legislative tariff could be imposed on Thai imports. The critical phase of negotiations is set to occur in the coming week, with Thailand's Finance Minister, Pichai Chunhavajira, scheduled to visit Washington for discussions.

Pichai has refuted the widely circulated 18% tariff rate, clarifying that this figure is an economic model used by the Bank of Thailand for scenario testing and not a final rate agreed upon in the negotiations. This clarification comes as speculation grows regarding the nature of the talks between the two governments.

Wuttikrai Leeviraphan, the Permanent Secretary for Commerce, confirmed that Thailand submitted an official proposal on June 20 following technical talks. He indicated that the offer could potentially reduce the tariff to the 10% minimum set in April under President Trump’s reciprocal trade framework.

President Donald Trump initially announced broad reciprocal tariffs on April 2 against virtually all U.S. trading partners. Although the base level was lowered to 10%, other rates were held for 90 days to enable negotiation. That deadline lapses on July 8, and those nations that do not reach an agreement face possible high duties the following day.

White House Press Secretary Karoline Leavitt stated on June 26 that the deadlines are not strict. She noted that the president could extend them at his discretion or direct deals with individual countries. This policy allows the president to levy rates that he feels profitably serve U.S. employees by merely exercising his will.

Howard Lutnick, the Secretary of Commerce, also stated that the administration aims to finalize major trade agreements with 10 leading countries within the next few weeks. Thailand, a leading exporter in the Southeast Asian region, is considered one of the countries with the highest priority in this effort. The current negotiations follow the recent agreement on a U.S.-China trade accord in Geneva.

Lutnick confirmed that China is also willing to provide rare earth elements that are crucial to industries important to the United States, such as defense and renewable energy. In return, Washington will drop Chinese export countermeasures. The agreement with China may serve as a model for other bilateral agreements being developed.

The European Union is also under pressure to conclude a trade deal. Trump has threatened to impose a 50% tariff on EU goods beginning July 9. European Commission President Ursula von der Leyen told reporters that the EU is ready to strike a deal but is prepared to see out every eventuality.

Von der Leyen stated that the Commission received the latest U.S. proposal and is analyzing its contents following an EU leaders’ summit. She emphasized the need to protect European interests if negotiations fail to yield the desired result.

Currently, most EU products are exposed to a 10% tariff, and additional rates have already been imposed on automobiles, steel, and aluminum. The Commission is coordinating with member states to intensify negotiations with Washington.

Thailand's diplomatic shift coincides with the U.S. transforming world trade through direct talks, the threat of tariffs, and accelerated bilateral agreements. Countries that cannot compromise stand to lose preferential access to the world’s largest economy.