BANGKOK — A political adviser to Thailand’s prime minister has responded to critics questioning the country’s measured approach to negotiations with the United States over recent tariff hikes.
“When you go into battle, you have to know your opponent and know yourself. If we jumped into negotiations as some suggested, we would be giving the US everything for nothing without getting anything in return. Why should Thailand waste its leverage?” said Supavud Saicheua, political adviser to the prime minister and chairman of the National Economic and Social Development Council (NESDC).
Thailand is among more than 50 countries reportedly affected following what US President Donald Trump has termed “Liberation Day.” Prime Minister Paetongtarn Shinawatra announced on April 6 the appointment of Deputy Prime Minister and Finance Minister Pichai Chunhavajira to lead negotiations with the US.
Build Alliances with American Farmers
Supavud explained that the talks led by Deputy Prime Minister Pichai would strategically engage multiple sectors, including American farmers. This approach aims to build alliances with US agricultural stakeholders as a step toward broader negotiations, particularly regarding agricultural imports for Thailand’s food processing industry and global exports. He noted feed corn as an example of a product where domestic production in Thailand remains below demand levels.
Defending the timing of Thailand’s response, Supavud argued that no one could have anticipated the specifics of Trump’s trade policies. He pointed out that the full extent of the sweeping changes only became clear after the official announcement on April 2, which revealed that even close US allies like the UK would face a 10% tariff as part of broader measures affecting 180 countries.
He also outlined Trump’s reasoning for the tariff hikes:
- The U.S. trade deficit, which puts the country at a disadvantage.
- Revenues from the tariffs will help reduce the U.S. budget deficit, driven largely by tax cuts for the wealthy.
- Trump’s intent to bring back domestic manufacturing and adopt an isolationist “make it, use it, grow rich at home” model.
No Phenomenal Offers
Wuttikrai Leeviraphan, undersecretary of the Department of Commerce and chairman of the U.S. Trade Policy Taskforce, explained that Thailand’s strengths lie in food processing and global exports.
As a major agricultural producer, especially of soybeans, wheat and corn, the U.S. could become an important source of raw materials for Thai imports, which are then processed and exported globally. In addition, American farmers are an important political base for the Republican Party and Trump himself.
Whether Thailand can secure tariff cuts depends on whether it can present a “phenomenal offer,” as Trump mentioned during his tariff announcement. Supavud noted that this begs the question: What kind of extraordinary offer could Thailand make? If such an offer is made prematurely, it could resemble a secret deal. Instead, Thailand is pursuing a middle path, neither wanting to negotiate nor retaliate, but looking for sustainable ways to navigate the Trump era.
Proposals of Tariff Differentials
Thailand has also considered the proposals of the US Trade Representative (USTR), particularly in relation to tariff differentials, and could bring some of its tariffs more in line with US levels. One possible strategy mirrors the approach of South Korea, which offers to import natural gas and oil from the US. Supavud confirmed that Thailand is looking into and expressing interest in importing US natural gas.
“These proposals act like a ladder that Thailand is setting up. If one day the US realizes that its own tariff hikes are hurting its economy and decides to climb down, it can do so via the ladder Thailand has provided,” he said.
Avoid Retaliatory Measures
Somchai Pakapasvivat, an independent economist and political analyst, meanwhile, emphasized that Thailand must avoid retaliatory measures that could provoke Trump, who is known for acting impulsively. Although some suggest allying with other affected countries, Trump has already warned that such measures would lead to even higher tariffs.
“Negotiations must be conducted carefully to protect Thailand’s interests without causing irritation or anger. We have to accept the fact that Trump is quick-tempered and acts emotionally,” Somchai said.
He added that many economists fear the US could fall into a recession, not necessarily another Great Depression like 1929, but one severe enough to trigger global trade wars. Unsold goods are expected to flood into Thailand, especially from China due to its lower production costs. Therefore, the Thai government needs to prepare for the impact.
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