BANGKOK — The Thai cabinet has acknowledged the new 19% tariff imposed by the United States. Thai exporters are expected to accelerate shipments before the new rate takes effect on August 7. The Ministry of Finance has prepared support measures for affected companies, while plans to reduce import tariffs on certain US goods to 0% await parliamentary approval.
Deputy Prime Minister and Finance Minister Pichai Chunhavajira announced the update following a special cabinet meeting on adjustment measures. He said the cabinet had noted and approved Thailand’s proposal to the US, submitted by “Team Thailand.” The proposal is non-binding and will now advance to the treaty negotiation phase for each sector.
Pichai noted that the US will publish the full details of Thailand’s proposals. Further negotiations will focus on trade rules, particularly regarding the origin of goods. The US is expected to scrutinize Thailand’s framework against those of other countries. This represents the first round in a series of negotiations.
Government Support for Thai Exporters
To support Thai exporters, Pichai said the government has prepared targeted assistance in two forms:
Soft Loans: The government will provide low-interest loans to address the backlog created by companies that had delayed production or exports due to tariff uncertainty. With the 19% duty rate now confirmed, exporters can proceed. Shipments made before August 7 will face a 10% tax, while those shipped afterward will be subject to the 19% rate. The government expects a surge in exports before the deadline.
Two funding sources will be available: short-term working capital for exporters with existing stock (6–12 months) and longer-term support to improve competitiveness. Authorities are collaborating with the Confederation of Thai Industries and the Thai Chamber of Commerce to develop sector-specific strategies.
US Import Tariff Reductions
Regarding when US goods imported into Thailand will benefit from 0% duties, Pichai said this will only take effect after parliamentary approval. Not all goods will receive immediate 0% tariffs—priority will go to products already subject to 0% tariffs under other trade agreements. Some items will have quantitative restrictions based on domestic demand.
“There is no fixed timetable yet. The US and Thailand must first finalize the agreement. Once completed and we’ve finished the necessary legal procedures, we will proceed,” Pichai explained.
In a television interview, Pichai cited examples of US goods Thailand cannot produce, such as cherries, suggesting these imports have minimal economic impact. For goods Thailand produces but in insufficient quantities, like corn, the country has requested adjustment periods of possibly five years or quota-based imports to protect local producers.
Specific Product Considerations
Corn: Thailand currently produces 10 million tons of corn for animal feed, but demand could rise to 13 million tons. Since US corn is significantly cheaper, Thailand is considering safeguard measures. Thai feed producers could be required to purchase the first 5 million tons from local farmers at domestic prices, then from neighboring countries, and only then from the US.
Additionally, Thailand will require certification that corn imported from neighboring countries is not associated with open burning practices, which contribute to PM2.5 pollution.
Pork: For goods Thailand produces in sufficient or surplus quantities, such as pork, Pichai emphasized there would be no immediate import liberalization. Domestic producers need time to improve efficiency and reduce costs. Any future market liberalization would be minimal—possibly less than 1% of total consumption—and subject to strict traceability requirements. Internal organs, which are extremely cheap in the US, will not be authorized for import.
Non-Tariff Barriers and Trade Facilitation
Pichai addressed the non-tariff barriers (NTBs) that the US has urged Thailand to remove, including cumbersome customs procedures, delayed documentation, and complex product standards. He described this as an opportunity to improve government efficiency through reforms such as one-stop services and digital systems, ultimately reducing costs and increasing Thailand’s competitiveness.
Anti-Circumvention Measures: Transshipped or camouflaged goods will be taxed at 40%, similar to Vietnam’s approach. Thailand must strengthen certification of product origins through Certificates of Origin (COO). The Customs Department and Ministry of Commerce will jointly inspect factories and trace production sources to ensure authenticity.
Thailand’s Concessions
Energy Imports: Thailand plans to increase crude oil and LNG imports from the US by approximately 10% of total oil imports (currently 120,000 barrels per day). US LNG is significantly cheaper, and a contract for 1 million tons of LNG (from Thailand’s annual imports of 15 million tons) has been signed, with deliveries starting next year. The government believes cheaper energy will help reduce electricity prices domestically.
Aircraft Purchases: Thai Airways needs to replace about 100 aging aircraft that haven’t been renewed since before COVID-19. Thailand has proposed a 5–10 year plan to purchase Boeing aircraft from the US.
Investment Protection
A crucial aspect involves ensuring continued US investment in Thailand, particularly in electronics manufacturing such as hard drives and servers. These companies account for 30% of Thailand’s trade surplus with the US. Pichai emphasized that these companies prefer to remain in Thailand due to the specialized workforce—more than 100,000 skilled workers trained over decades who would be difficult to replace in the US. Retaining these companies helps avoid job losses and factory relocations.
Pichai described the negotiations as more than customs talks—they are strategic discussions encompassing market access, trade facilitation, and investment promotion. The goal is to maintain Thailand’s global competitiveness while using this opportunity to drive long-term economic reforms.
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