BANGKOK — Prime Minister Paetongtarn Shinawatra addressed concerns following US President Donald Trump’s announcement to impose a 36% import tariff on Thai goods, one of the highest rates compared to other countries. The tariff is part of Trump’s broader “Reciprocal Trade and Tariffs” policy, which includes a minimum 10% tariff on imports from all countries, set to take effect on April 9, 2025.
“The 36% figure is quite high, and so we have prepared both short-term and long-term plans,” the Prime Minister explained in a recent interview. “In the short term, we need to look at what we can negotiate to help exporters and find ways to support or relieve them.”
The Thai government formally acknowledged the US need to rebalance trade relationships but emphasized that the tariff increase will inevitably impact all trading partners and affect US consumer purchasing power. Prime Minister Paetongtarn advised Thai exporters to diversify and seek new potential markets to reduce dependency on the US market.
Negotiation Strategy
The Prime Minister revealed that Thailand needs to restructure its own import tariffs from the US and has already established a negotiating team. “Once we have these figures, we need to negotiate and adjust our tax structures sensibly,” she added. “Nowadays, negotiations follow the ‘more for less, less for more’ approach and not simply unilateral demands.”
The Finance and Commerce ministries are currently working to find solutions as the announcement is still fresh. Various measures have been prepared, both provisional and those under discussion.
When asked about the negotiation process, the Prime Minister explained that Pansak Vinyaratn, Chief Advisor on Policy to the Prime Minister, has been overseeing trade matters with the United States, reviewing all imported and exported products. Meanwhile, negotiations will be handled by the Permanent Secretaries of the Commerce and Finance ministries.
“We must also consider who we will negotiate with, and at what level, because there are several stages. At the working level, the Permanent Secretaries will lead discussions with their U.S. counterparts, including ministers. We expect new measures to be announced shortly,” she stated.
Clarifying the Numbers
The Prime Minister clarified confusion regarding the tariff percentages: “The 72% figure quoted by the US is calculated from the total limited tariffs, half of which is 36%. Our actual average is 9%, but their method of calculation is different from ours.”
She also addressed concerns about Chinese goods being relabeled as Thai exports, saying controls were being tightened. “This problem has occurred even before China raised tariffs, so it needs to be closely monitored,” she emphasized.
When questioned if the increase in tariffs would cause Thailand’s GDP to miss government targets, she replied firmly: “We must not allow the situation to get to that point. This morning I spoke to the deputy finance minister about this. He will take care of this matter within the Ministry of Finance and provide detailed explanations to the public as soon as possible.”
Proactive Preparation
The Thai government has been proactive in preparing for changes in US trade policy. A working group on US trade policy was established on January 6, 2025, before President Trump officially took office. This group has been monitoring developments for three months to prepare proposals for trade rebalancing.
In her official statement, the Prime Minister emphasized Thailand’s commitment to creating long-term trade stability with the US and highlighted Thailand’s potential as an investment partner. Thailand hopes the Trump administration will consider the goal of creating joint long-term economic security and affirmed Thailand’s intention to remain an ally and economic partner to the United States.
“In fact, we’ve been discussing this for some time, particularly about establishing a negotiating team. So there’s no need to worry,” reassured the Prime Minister.
Opposition Proposals
Weerayut Kanchoochat, Deputy Leader of the People’s Party, announced proposals to the government for handling Trump’s tariffs:
- Use existing measures that the United States considers obstacles as bargaining chips. Don’t abandon everything at once, but gradually phase them out with strategic planning.
- Avoid secretive negotiations, unlike what happened with the Chinese free trade agreement where those who lost benefits were unaware and didn’t receive help to prepare. Information about who will gain and lose from our bargaining points should be disclosed to the public.
Additionally, the government should be ready to provide remedies for those who will be disadvantaged, who are often small businesses and individuals. He also suggested imagining a world without America and China, considering how Thailand could adjust supply chains for each product to cope with the increasingly severe trade war.
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