Thailand braces for US tariff deadline, hopes for extension in critical talks

With the US tariff suspension set to expire on July 9, Thailand's Finance Minister Pichai meets US Trade Representative to negotiate an extension and lower tariffs.

The 90-day US tariff suspension on Thailand is set to expire on July 9, 2025, and while China has already reached an agreement with the US, several countries, including Thailand, are still in talks. Within ASEAN, no nation has concluded negotiations yet.

On July 3, Thai Deputy Prime Minister and Finance Minister Pichai Chunhavajira is scheduled to meet with US Trade Representative (USTR) Jamieson Greer to discuss reducing the countervailing tariffs imposed on Thailand from 36% to the lowest possible rate. Thailand has made several proposals, receiving positive signals from the US side.



Vuttikrai Leewiraphan, Permanent Secretary of the Commerce Ministry, expressed confidence that Thailand’s proposals would send a positive signal for the negotiations, adding that not only previous offers would be discussed but also new ones that Pichai will present.

“The US will decide the final tax reduction based on its own considerations, but we expect to see clearer results after the discussion with the USTR on July 3,” he said.Nalinee Taveesin, Thailand’s Trade Representative, commented that negotiations with the US are progressing well as Thailand had formally engaged before the 90-day deadline.

“While it’s unclear whether the tax suspension will be extended, we do have a chance due to the official proposals Thailand submitted. These have been received positively, with the US considering them a promising proposal, focusing on mutual benefits for both countries,” Nalinee stated.

Regarding concerns from the private sector and foreign investors about the impact of the tariffs, Nalinee added that there is currently no significant worry from businesses or investors in Thailand.
Concerns about US tariffs impacting Thailand’s economy in H2

On July 2, the Joint Standing Committee on Commerce, Industry, and Banking (JSCCIB) comprising the Thai Chamber of Commerce, the Federation of Thai Industries (FTI), and the Thai Bankers’ Association met to assess the economic situation. The JSCCIB discussed the potential impact of US tariff negotiations on Thailand’s economy, estimating a growth range of 1.5-2.0% based on different scenarios.

1. Low Tariffs: If successful tariff negotiations lead to a universal tariff rate of 10%, Thailand’s economy in 2025 would grow by 2.0%.

2. Partial Reduction in Tariffs: If some reduction occurs, with universal and reciprocal tariffs set at 18%, along with specific tariffs being reduced, the economy would grow by 1.5%.

Payong Srivanich, Chairman of the Thai Bankers' Association and JSCCIB, warned that the second half of 2025 poses economic risks due to trade negotiations between the US and its trading partners. There is concern that tariffs may significantly hurt Thailand’s exports. The JCC plans to meet with relevant government agencies to discuss and align on the direction of the economy.

Although Thailand’s export value increased by 14.9% in the first five months of 2025 compared to the previous year, this surge is mainly due to companies accelerating imports before the end of the 90-day tariff suspension. As a result, the export growth does not reflect value-added production or job creation within the country, as much of it involves transshipment using Thailand as a transit base.


Concerns over transshipped Thai goods being exported to the US

Kriengkrai Thiennukul, President of the Federation of Thai Industries (FTI), stated that during the first five months of 2025, Thai exports to the US grew by 27%, while imports from some countries increased by 29%. This indicates that goods are being imported from other countries through Thailand for export to the US, which has a significant impact on the trade situation.

The JSCCIB has predicted that in the second half of the year, Thai exports are likely to shrink by 10% compared to the same period last year. This could result in overall export growth for 2025 being close to 0%, directly impacting the manufacturing sector, employment, and the income of workers in related supply chains.

"Negotiating with the US over tariffs is one of the key agendas for Deputy PM Pichai, with two main objectives: 1) to protect domestic producers and 2) to find ways to avoid trade penalties," said Kriengkrai.

Additionally, the JSCCIB disagrees with the Bank of Thailand's (BOT) economic growth forecast of 2.3% for the year. The JSCCIB argued that no clear factors have emerged to drive economic growth at the level predicted by the BOT. They continue to project a growth rate of 1.5-2.0%, with exports ranging from -0.5% to 0.3%, and inflation expected to be between 0.5-1%.


Thailand missing trade deals could affect commerce

Phot Aramwattananon, Chairman of the Thai Chamber of Commerce, stated that the outcome of the tariff negotiations before the July 9 deadline will be a key indicator. The results must also be compared to those of regional competitors such as Vietnam, Indonesia, and Malaysia. If the negotiations fail to produce a tangible conclusion or an extension is not granted, it may lead to higher tariffs, which would severely impact Thailand’s manufacturing sector and supply chains.

"Amidst these uncertainties, the JSCCIB is closely monitoring the outcome of the tariff negotiations. If an agreement is reached but Thailand’s tariffs remain higher than those of competitors, it will be a major issue. Alternatively, if the negotiations do not conclude before the deadline and the US announces the same tariffs as before, it will have a broad impact on global trade, disrupting demand and supply chains. Thailand will certainly be affected, as we export over 18% of our goods to the US,” he said.

The JSCCIB is also planning to meet with the Bank of Thailand, the National Economic and Social Development Council (NESDC), the Ministry of Finance, and the Ministry of Commerce to exchange information and create a shared understanding of how to approach the economy in each sector.

Furthermore, the JSCCIB has proposed focusing on key measures over the next 6 months to 1 year to turn the crisis into an opportunity and restore trust and confidence. The focus will be on the rule of law and protecting the domestic manufacturing and services sectors.


Pichai highlights Thailand's "win-win" approach in US negotiations

Deputy Prime Minister and Minister of Finance Pichai Chunhavajira revealed that the first mission of his visit to the United States was to meet with the U.S. Chamber of Commerce (USCC), led by Charles Freeman, Senior Vice President for Asia, along with a high-level delegation from major U.S. companies investing and doing business in Thailand.

This meeting was a significant opportunity for exchanging information, opinions, and suggestions, particularly regarding the trade and investment situation under U.S. tax policies. It also aimed to discuss solutions and obstacles faced by the business sector to make Thailand a more attractive country for investment.

Thailand continues to fully engage in trade negotiations with the United States, seeking a "win-win" agreement for all parties involved. Pichai expressed gratitude to the USCC for its continuous support, both as a forum for exchanging views and as a voice reflecting to the U.S. government the importance of Thailand in the global economic chain.

“I assure our private sector partners that the government will continue to promote trade and investment policies, maintaining a transparent, friendly, and predictable environment,” Pichai said.

Additionally, he confirmed to the U.S. Chamber of Commerce that both Thailand and the U.S. share the same goal: a "win-win" economic cooperation. He is confident that, with mutual understanding and trust, both countries will drive their economic relationship to sustainable growth.


Proposal for agricultural cooperation

Furthermore, Pichai met with the U.S. Grains Council to discuss and explore additional trade opportunities in agriculture between Thailand and the U.S., focusing on fostering mutually beneficial cooperation (win-win) for both nations.

The discussions emphasised the importance of enhancing trade in the agricultural sector, while safeguarding the interests of Thai farmers. The U.S. Grains Council expressed agreement with the proposals put forward, considering them beneficial for both parties, covering issues related to tariff barriers and non-tariff measures.

"There were several proposals from the U.S. Grains Council that we found interesting, and we hope that the association will play a key role as an important partner in supporting the negotiations to achieve our objectives," said Pichai.

The trip continues, with the "Team Thailand" scheduled for further discussions to push forward policies that will benefit both countries in the future.

(2025/07/03-00:00)