Thailand faces mounting US tariffs as Trump’s trade war escalates, with new auto levies and economic uncertainty ahead. The kingdom awaits Bangkok’s response as April 2nd reciprocal tariffs loom, threatening exports and manufacturing jobs.
‘Liberation Day’ in Washington DC for the US economy could mean the opposite for Thailand next week. April 2nd is just days away, and Thailand has been confirmed as among a targeted list of countries labelled the ‘Dirty 15’ by US officials. However, despite the possibility being raised last week by US Treasury Secretary Scott Bessent of mitigation talks, there is still no word of a possible escape for Thailand and its exporters. Meanwhile, the US is pressing ahead with a 25% tariff on automobiles, a move which is already impacting the kingdom’s troubled auto manufacturing sector.
Anxiety in Thailand is starting to rise as there is still no news on government action in Bangkok in relation to threatened reciprocal tariffs to be imposed by the United States on April 2nd.
Last week US Treasury Secretary Scott Bessent indicated the possibility of leeway if countries put forward proposals to the United States.
Nevertheless, this week, speaking with Fox Business News in the United States, Kevin Hassett, a key US advisor, said it is unlikely any country will avoid impact on April 2nd.
For instance, he cited non-tariff barriers as being particularly difficult to change quickly.
Thailand included in US ‘Dirty 15’ target list as the trade deficit with the United States continues to grow
At the same time, he confirmed hectic talks, for example, between the US and the United Kingdom, in addition to India in recent days. Undoubtedly, Thailand is among the ‘Dirty 15’ on the American target lists for reciprocal tariffs.
The kingdom in 2024 recorded a goods trade deficit of $45.6 billion with the United States. Notably, this was a sharp 11.7% increase from 2023. Meanwhile, overall bilateral trade between the two countries is estimated at $81 billion. Specifically, exports to the United States in 2024 were $54.96 billion.
Significantly, however, Thailand saw sharply increased imports from the United States in 2024, up by 14.7%, reaching $17.7 billion. Meanwhile, its trade surplus overall with the United States was $35.4 billion.
Minister of Commerce Pichai Naripthaphan has repeatedly insisted that Thailand will work hard to avert the planned tariff on April 2nd. Indeed, the minister visited Washington DC in February seeking talks on the trade relationship between the two countries.
The kingdom was already hit with a rise to 25% on March 12th on steel and aluminium imports. Indeed, last year Thailand exported $505 million worth of aluminium to the US market. The previous rate had been 10%.
Thailand faces new 25% auto tariff under US Trade Act as fears mount over economic repercussions ahead
In addition to the kingdom’s concerns over reciprocal tariffs, the United States has also this week announced a new auto tariff. Thailand has been targeted under Section 232 of the 1962 US Trade Act. The new auto tariffs will be 25%.
Certainly, this is already impacting Thailand’s crucial automotive sector.
On Tuesday, the Federation of Thai Industries (FTI) Automotive Club boss and Vice Chairman Surapong Paisitpatanapong confirmed this.
He revealed that Thai-based auto manufacturers were postponing the launch of new models. In short this is due to the new US tariffs. In addition, there are also tighter emissions controls in other jurisdictions such as the European Union.
US President Donald Trump announced on Wednesday, March 26, local time, that he will move forward with plans to impose tariffs on imported cars that are not made in the United States, starting at a rate of 2.5% and rising to 25%, in an escalation of the trade war he sparked after returning to office earlier this year.
The tariffs would take effect on April 2, the same day he plans to announce reciprocal tariffs on 15 countries that have created US trade deficits, known as the Dirty 15, including Thailand.
US tariffs on foreign cars and light trucks could have severe consequences for Thailand’s economy
New vehicle import taxes will start on April 3, and in addition to cars, the measure also covers light trucks.
The order will initially exempt auto parts that fall under the US-Mexico-Canada Agreement (USMCA), a trade deal Trump negotiated during his first term in office.
However, this could change as the US Department of Commerce and the US Customs Administration (CBP) work together to determine the process for levying tariffs on non-US components.
Auto industry experts predict that the measure will push up car prices and hurt production. Trump sees the tariffs as a revenue-raising tool to offset tax cuts he has pledged and revive a sluggish US industry.
Indeed, this latest tariff move has sparked fury from players such as Canada, Mexico, and the European Union directed at the Trump administration.
European Union Commissioner President Ursula von der Leyen said the move was regrettable, while Canadian PM Mark Carney described it as an attack on Canadian workers.
Despite these moves, Thailand’s automotive manufacturing is in another tailspin this year. However, the bad news for 2025 is targeted at exports. While sales fell precipitously in 2023 by 26.2%, car exports were only down by 8.8%.
Declining exports and falling domestic sales compound economic concerns for Thailand’s auto sector
Presently, this is reversed pattern with exports falling 18.1% in the opening two months to 143,644 units. Car sales in January in Thailand were shown by 8.34% to 81,323 units. Indeed, they are down by 9.35% for the opening two months at only 97,395 units.
In 2024, Thailand exported 42,000 passenger cars to the United States. At the same time, it exported $4 billion worth of parts.
Indeed, it is a recognised part of the US supply chains for the industry. Critically, this is now threatened, along with valuable plants and investments in the country, together with well-paid jobs.
The tariff announcement has also caused turbulence in financial markets.
US stocks ended lower on concerns about tariffs, with the S&P 500 down 1.1% ahead of Trump’s press conference and down more than 4% for the month of March, its biggest decline in nearly a year.
S&P 500 futures also fell another 0.4% late Wednesday, signalling a weak opening on Thursday.
Thai government faces growing pressure as US tariff deadline looms with economic risks escalating
Nonetheless, it is the potential wider shock of reciprocal tariffs that must concern the government at this time. April 2nd is less than a week away.
In contrast, the mood in Washington DC is optimistic. Indeed, US officials describing the date as ‘Liberation Day’ for the US economy.
Certainly, US Secretary of Commerce Howard Lutnick is enthusiastic. He recently told US media that President Trump’s vision is to ensure that tariffs reduce US income tax.
For instance, a target rate of zero for those earning less than $150,000 paid for by the new tariff regime.
Indeed, the ultimate goal is to abolish all income tax. After that Trump has taled about replacing the Internal Revenue Service (IRS) with an External Revenue Service for tariffs.
Trump has stated that the expected tariffs would raise “rather astronomical” amounts of money for US coffers.
Rising optimism Thailand can do a deal with the United States to avoid April 2nd worldwide reciproval tariffs regime
Thailand waits on new Trump reciprocal trade tariffs to be launched within hours from the White House
Trump Presidency already having a heavy impact on Thailand even before he talks trade with Bangkok
Meanwhile, Thailand’s government has yet to announce countermeasures or diplomatic initiatives to mitigate the potential economic shock.
Given the lack of response from Bangkok, Thai businesses remain on edge, awaiting developments from Washington.
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Further reading:
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
Trump’s trifecta triumph means Thailand will be more on edge as he prepares to take power in January
