China warns Thailand against siding with the US as trade talks are postponed again. Pressure mounts on Bangkok over F-16 jet deal rejection, cabinet reshuffle rumours, and fears of economic fallout from deepening US-China tensions in Asia-Pacific.
Thailand’s appointment with US negotiators has been postponed for the second time in a week. The news comes on the same day that China announced that it will retaliate against any country ‘pleasing’ the United States at China’s expense. Certainly, it is being challenged at this time to choose sides both economically and geopolitically. At the same time, Deputy Prime Minister Phumtham Wechayachai, seen as extremely close to Beijing, sharply criticised an American proposal to finance the Thai purchase of F-16 fighter jets. At the same time, both ministers leading Thailand’s US negotiating team are being tipped for removal in a cabinet reshuffle.
China has fired a shot across its trade partners over its escalating trade war with the United States. In brief, the Communist power said it would retaliate against any country that ‘pleases’ the United States in furthering the trade war. In particular, any agreement that compromises or threatens China’s interests.
The Ministry of Commerce in Beijing issued the warning in a statement on Monday.
It said it would “resolutely take reciprocal countermeasures” against any agreement deemed to harm Chinese interests. While Beijing insists it supports nations resolving their disputes, it stated it would never accept deals reached at its expense. “Compromise cannot bring peace, and compromise cannot bring respect,” a ministry spokesperson added.
China’s retaliation threat puts pressure on Thailand and Vietnam not to fully curb Chinese transshipments
Certainly, this is a clear threat to both Thailand and Vietnam. Both countries are committed to ending China’s ability to ship its exports through their ports. Indeed, this proposal from Thailand will be at the centre of negotiations in Washington DC when they take place.
Vietnam has already taken steps to clamp down on Chinese goods being rerouted through its territory. Meanwhile, US trade officials have urged Thailand to curtail such transshipments to help ameliorate the tariff regime and trade relationships more effectively.
The threat comes when there are conflicting signals about Thailand’s negotiation efforts with the United States. For instance, on Monday, a date for talks in Washington DC was again postponed. This was the second postponement.
Thai government sources suggested that the cancellation came from US trade officials. At the same time, reports are circulating of new appointments. For instance, there are strong indications that ministers leading the US trade negotiations will be removed.
Thailand’s top trade ministers under pressure amid shifting US strategy and looming cabinet reshuffle
The talks are being led by Deputy Prime Minister Pichai Chunhavajira, who has the confidence of Thailand’s business community.
At the same time, he is seconded by Minister of Commerce Pichai Naripthaphan. Commerce Minister Pichai recently announced that Thailand will soon conclude a trade deal with the European Union. Notably, Pichai is considered a strong performer in the cabinet.
Both are now tipped for removal in a looming cabinet reshuffle.
This political instability coincides with heightened US pressure. Presently, Washington is reportedly seeking to form a loose coalition to limit China’s economic leverage. Nations engaging in trade talks with the United States have been warned. The message is that exemption from Trump-era tariffs may hinge on their willingness to restrict trade with China. In particular, to avoid absorbing its excess manufacturing capacity.
At the same time, on Monday, Deputy Prime Minister and Minister of Defence Phumtham Wechayachai made a statement about military procurement. In short, it appeared to reject a US proposal to sell Thailand F-16 fighter jets.
Thai military signals preference for Swedish Gripens over US F-16s as American pushed for stronger alignment
Certainly, it was already known that the military has a preference for Swedish-made Gripen jets. The Royal Thai Air Force has both types in its service but significantly more F-16s. Indeed, it has 51 F-16s in service compared to 11 Swedish fighters.
Nonetheless, the Air Force has strongly signalled its preference for the Swedish option. It is believed that the reason is a better price and package offer.
Defence procurement analysts have confirmed that Saab’s Gripen jets come with more favourable terms. They are also preferred particularly regarding logistics, training and long-term servicing.
Nevertheless, Deputy Prime Minister Phumtham’s stance on Monday was sharp. The Defence Minister is seen as particularly close to China. At the same time, he is a long-time trusted lieutenant of former Prime Minister Thaksin Shinawatra, both in business and politics.
Significantly also, he is seen as a key figure in the controversial decision last January to deport 40 Uyghurs from Thailand to China. This late-night operation went ahead on February 27th. Afterwards, senior Thai officials, including cabinet members, were sanctioned by the US administration.
US F-35 rejection and Thai-China ties weigh heavily on strategic defence decisions and procurement plans
At this time, it’s accepted that the United States wants Thailand to shift its defence spending towards the United States. Indeed, the F-16 jet proposal was made personally to the military chiefs by US Ambassador Robert Godec in June 2024.
Significantly, the US had previously rejected Thailand’s request for advanced F-35 fighter jets. Washington DC said that Thailand lacked the capability to host them. However, there is an acknowledgement in US military circles that Thailand’s ambiguous relationship with China was behind this.
Reports suggest that Washington views suspiciously Thailand’s close ties with China. This includes recent arms deals and coordinated regional diplomacy. Certainly, it is seen as complicating deeper military cooperation with the United States.
On Monday, Deputy Prime Minister Phumtham particularly rejected the US offer to finance the procurement upfront through a US bank. Phumtham described this as an onerous requirement. Last year, Ambassador Godec highlighted this as a benefit of the American proposals.
US financing terms for F-16 deal dismissed as Thailand cites unaffordable conditions and fiscal needs
Phumtham reiterated that Thailand would not proceed with the purchase under such terms. At length, he cited the nation’s other pressing financial priorities. He said these constraints made the US financing package unworkable.
In conclusion, Deputy Prime Minister Phumtham insisted that the loan terms were unacceptable to Thailand. At the same time, Thailand is thought to be in the market for C-130 military transport aircraft, in addition to Stryker armoured vehicles.
However, he confirmed that no final decisions had been made on either procurement. He was still awaiting clarification from the finance minister’s upcoming negotiations in Washington. The outcome of these talks must be considered before making any budget commitments.
Certainly, it will also impact the 2026 budget. In the meantime, this will undoubtedly be a key area for discussion. That is when Thai negotiators finally sit down with their US counterparts.
Thai defence budget talks still open as United States seeks leverage over trade and strategic decisions
The defence ministry has stated that overall military spending allocations have yet to be finalised. Of course, this leaves open the possibility of a shift depending on how trade negotiations proceed. Especially considering what concessions the United States may offer.
On Monday, Deputy Prime Minister and Minister of Finance Pichai said he would postpone flights for Thailand’s negotiators. It is certainly becoming clearer that this new trade war may spell the end of Thailand’s traditional fence-sitting disposition.
In short, it is now trapped between lack of access to US markets while facing both abuse through company nominees and dumping from China. Thailand does not need US warnings of this danger.
Thailand’s industrial base squeezed by China while meanwhile access to US markets grows more uncertain
It has seen its manufacturing base decimated in recent years from Chinese infiltration. The firms from China are state-subsidised and operate on a larger scale. Therefore, Thailand may have to choose sides economically.
Certainly, after today’s announcement by China, it is clear that economics and geopolitics are now intrinsically linked. At the same time, tensions and stakes are rising.
Thai economy thrown into disarray by Trump’s tariffs. Exports and Tourism may both be far lower in 2025
Pichai’s team not to fly to the United States this week but next week as US-Chinese tensions escalate
Finance Minister to hold critical talk with Bank of Thailand Governor on US holding before he flies out
Beijing’s Ministry of Commerce reiterated its resolve to “strengthen solidarity” with like-minded countries. It calls for a concerted effort against what it called “unilateral bullying.” In parallel, China has stepped up diplomatic overtures across Southeast Asia.
President Xi Jinping recently visited Vietnam, Malaysia, and Cambodia, urging regional unity in resisting trade restrictions imposed by the United States.
Join the Thai News forum, follow Thai Examiner on Facebook here
Receive all our stories as they come out on Telegram here
Follow Thai Examiner here
Further reading:
Thaksin does not rule out joining talks in US as Thai team finalises plans. They fly out on Thursday
Trump’s remaking of World trade, if it works, will force Thailand to decide between the US and China
US offers a 90-day tariff pause but Thailand must move faster as it already faces shaved GDP in 2025
PM addresses the nation in shock over last week’s earthquake and this week’s Trump tariff bombshell
