Thailand Prepares Countermeasures as "Trump" Tariff Threat Looms, Expects Billions in Losses
Officials outline plans to mitigate impact, including import adjustments and proactive negotiations with US
Thailand is bracing for a potential economic hit, anticipating billions of dollars in losses should the United States implement increased tariffs under a possible future administration.
Officials have outlined a series of countermeasures, including adjustments to import taxes and intensified negotiations with the US, to mitigate the anticipated damage.
Wuttikrai Leeviraphan, permanent secretary of Commerce Ministry and chair of the United States Economic Policy Working Group, alongside representatives from the Thai Chamber of Commerce, the Federation of Thai Industries, and various government agencies, announced the nation's preparedness in response to potential US trade policy changes.
Wuttikrai detailed the four types of tariff measures the US might employ, ranging from country-specific tariffs targeting problem areas to retaliatory tariffs.
He emphasised the significant impact any US tariff increase would have, given the US's position as Thailand's leading export market.
"We are preparing for a range of scenarios," Wuttikrai stated. "The US accounts for a substantial portion of global trade, and any changes to their policies will inevitably affect us."
Thailand has already experienced the initial impact of US tariffs on steel and aluminium, implemented in March. Further tariffs are expected on key sectors such as semiconductors, pharmaceuticals, and wood products.
There’s also the threat of retaliatory tariffs, potentially mirroring Thailand’s own import duties on US goods, which could result in losses of $7-8 billion, impacting products like rice, processed shrimp, tyres, and car parts.
The government's strategy involves proactive engagement with US officials, including meetings with members of Congress and senators, and attempts to engage with the United States Trade Representative (USTR).
Thailand is also considering adjusting its import policies to address trade imbalances, potentially increasing imports of agricultural goods such as corn, soybeans, and meat, as well as aircraft and energy products.
However, officials acknowledge that increasing imports alone will not resolve the substantial trade deficit. A broader approach is needed, focusing on investment, partnerships, and trade stability.
Thailand aims to encourage increased Thai investment in the US, particularly in states prioritised by a potential future Trump administration, to create jobs and strengthen economic ties.
Concerns raised by the US regarding the potential misrepresentation of Thai goods due to production base relocations are also being addressed. The Ministry of Commerce is actively monitoring at-risk product categories, particularly steel and Chinese imports.
Thailand is also preparing to provide relief to affected businesses, with short-term measures such as interest rate reductions and increased access to funding, and long-term strategies including accelerating free trade agreement (FTA) negotiations, notably with the European Union.
“We are committed to minimising the impact of any US tariff increases while maintaining a constructive relationship,” Wuttikrai affirmed. “Our negotiation strategy prioritises mutual benefits and a balanced approach.”
The final decision on the negotiation strategy will rest with the Prime Minister.
