Thailand faces a severe US tariff threat as Trump targets global trade. PM meets business leaders to plan defence, promote local buying and curb cheap Chinese imports amid rising tensions and global backlash over sweeping US steel and aluminium tariffs.
As US President Donald Trump readies his massive retaliatory tariffs regime for April 2nd, Thailand is in the crosshairs. With a $45.6 billion trade deficit with the United States, the kingdom is a significant target. On Thursday, business leaders were due to meet Prime Minister Paetongtarn Shinawatra at Government House. Their plans include trying to negotiate with the White House, encouraging Thais to buy locally and implementing a more focused crackdown on cheap Chinese imports, which rose 27% in January compared to the year before. Meanwhile, Trump and Commerce Secretary Howard Lutnick have already imposed painful steel and aluminium tariffs this week, sparking outrage among key allies worldwide.
Thailand’s Prime Minister Prayut Chan-o-cha met with business leaders at Government House on Thursday to discuss the rising threat of US tariffs. The meeting comes ahead of an April 2nd deadline for the imposition of retaliatory tariffs by the United States. This date has been set by US President Donald Trump and his Secretary of Commerce, Howard Lutnick.
Significantly, this new tariff regime will be imposed on all countries. In short, whatever tariffs foreign countries impose on the United States will become the default tariff structure.
Blanket tariff proposal may impact Thailand’s role as a key base for Chinese production and exports
It is the blanket nature of this proposal that may impact Thailand. In particular, many Chinese companies use Thailand as an intermediate production base when shipping from other countries.
At the same time, Thailand is increasingly seen as linked to China’s manufacturing output. For instance, Indonesia has just imposed a tariff regime on nylon film products from Thailand. The tariff, ranging from $0.076 to $1.92 per kg, has been imposed on China, Taiwan, and Thailand.
Certainly, at this point, it has not yet been confirmed if Thailand will be subject to the new tariff regime on April 2nd. Indeed, no country has been formally informed yet.
Therefore, ahead of this, a delegation from the Joint Standing Committee on Commerce, Industry, and Banking (JSCCIB) convened their meeting at Government House. The delegation is led by the Federation of Thai Industries (FTI). Its Chairman is Kriengkrai Thiennukul.
Thai delegation to propose key strategies to mitigate the impact of US tariffs and boost local trade
In summary, on Wednesday Mr Kriengkrai told reporters that the delegation would propose three key initiatives to the Prime Minister. Firstly, there must be a campaign among the Thai public and the Thai industry to buy locally sourced products and services.
Additionally, they called for a budget to promote this. They hope that the amount of Thai products sold within Thailand’s borders could increase from 15% to 50%. The successful campaign would potentially increase GDP by between ฿400- ฿500 billion. In short, this is a call to economic nationalism. Indeed, this may be the future path in geopolitical trends.
Unfortunately, Thailand’s days of balancing economically its ties between the United States and Chinese economies may be limited. This is happening as free trade is being curtailed in a disrupted world economy.
Before that, Thailand may have to prepare carefully for the new US tariff regime. At that time, Minister of Commerce Pichai Naripthaphan indicated that Thailand was already planning to flexibly adjust its tariff regime.
US still finalising tariff measures as Thailand considers tighter controls on rising Chinese imports
The minister was in Washington DC in February. However, the United States is still working on its tariff measures. At the same time, it could be that its April 2nd plans will be adjusted in response to interactions caused by more recent tariff impositions.
Thirdly, the business delegation is urging the Prime Minister to tighten controls on Chinese imports. They are calling for stricter technical standards and monitoring of Chinese goods flowing into the kingdom.
For instance, in January 2025, Chinese imports rose 27% compared to January 2024. This figure comes despite a higher VAT regime and other inspections imposed earlier by the Commerce Ministry.
Ongoing data from the Office of Industrial Economics (OIE) shows Thai manufacturing contracted by 1.79% last year, while the country runs a declining trade deficit with China. In 2024, this was $6.8 billion, significantly down from $36.6 billion the year before.
High debt and obsolete production base threaten Thailand’s competitiveness in global trade
The problem for Thailand is that its manufacturing base is rapidly becoming obsolete. At the same time, it is encumbered by a high level of debt held by SME manufacturers and exporters, accounting for 90.8% of GDP, in addition to household debt.
Meanwhile, the United States is Thailand’s largest export market. It is also where the kingdom enjoys a trade surplus. Exports to the United States in 2024 amounted to $63.3 billion, leaving a massive deficit of $45.6 billion.
In contrast, the entire 27-nation European Union recorded a trade deficit of $235.6 billion with the world superpower.
In particular, analysts must note that Trump’s imposition of the new tariff regime has been explained by his Commerce Secretary, Mr Lutnick, not as a trade-balancing tool. Instead, the tariff income is seen as an alternative to taxation.
Trump considers using tariff income to cut taxes amid global concern over aggressive trade policies
Just this week, the hawkish official pointed out that America is the heart of the world economy. Essentially, its $29.72 trillion economy drives global growth.
Therefore, it is suggested that US President Donald Trump plans to use tariff income to lower income tax in the United States.
Previously, President Trump had suggested abolishing income tax altogether. However, this week Mr Howard suggested that income tax would be waived for individuals earning less than $150,000.
Consequently, such a move is expected to stimulate the economy and lead to explosive economic growth.
Meanwhile, in case Thailand has any doubts that the United States is pushing ahead with its plans comes news of widespread turmoil after Trump’s latest move.
Trump’s sweeping steel and aluminium tariffs trigger global backlash and retaliatory threats
On Wednesday, Trump imposed a 25% tariff on all steel and aluminium imports to the United States. The tariff extends to smaller items such as aluminium cans and a wide range of products.
The move has triggered outrage worldwide. Notably, the European Union responded with indignation and announced retaliatory tariffs on $31.4 billion worth of US products, set to take effect in April.
“We firmly believe that in a world of geopolitical and political uncertainty, it is not in our mutual interest to burden our economies with such tariffs,” said European Union Commission President Ursula von der Leyen.
China has also been hit by the new regime and has prepared a response. Indeed, this is the third wave of new tariffs against China since Trump took office on January 20.
Japan and global partners express concern over US tariffs as nations explore negotiation options
In Japan, the newly imposed tariffs drew a sharp rebuke from the Japanese government. Chief Cabinet Secretary Yoshimasa Hayashi said the move would have a ‘serious impact’ on Japan’s relationship with the United States.
Thai firms call for urgent and robust action on cheap Chinese imports as manufacturing shrinks
Trump hits Canada and Mexico with 25% tariffs as he confirms reciprocal tariff regime from April 2nd
Similar responses were heard from the United Kingdom, Canada, and Australia. UK Trade Minister Jonathan Reynolds said all response options were on the table. In contrast, Australian Prime Minister Anthony Albanese explained that Australia would be slow to retaliate.
In the last 24 hours, it has emerged that special quotas are available to Brazil, Mexico, and South Korea. These are either part of trade agreements or have been negotiated separately.
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Further reading:
Trump hits Canada and Mexico with 25% tariffs as he confirms reciprocal tariff regime from April 2nd
Trump hits Canada and Mexico with 25% tariffs as he confirms reciprocal tariff regime from April 2nd
Economic growth in 2025 faces growing downside risk as growth for 2024 now confirmed at only 2.5%
Trump Presidency already having a heavy impact on Thailand even before he talks trade with Bangkok
Trump Presidency already having a heavy impact on Thailand even before he talks trade with Bangkok
Economy sees sharp setback with lower private spending, investment and foreign tourism income
