Thailand braces for Trump’s tariffs as ‘Liberation Day’ looms. Fears grow over economic fallout as US trade barriers hit within hours. Trump hints at leniency, but uncertainty grips businesses and markets, with Thailand’s economy facing potential shocks.
US President Donald Trump’s tariffs are due to be imposed in the next 24-48 hours. Certainly, there are fears in Thailand that Liberation Day in the United States may be another earthquake for Thailand’s already reeling economy. However, there remains hope. On Monday, Trump suggested that he would be “kinder,” although Thailand is almost certainly among the countries targeted. On the one hand, there is no escaping a realignment of world trade, while on the other, the price for Thai disruption has already been priced into the outlook ahead. At least, that is the hope.
Thailand’s government is bracing for President Donald Trump’s reciprocal tariffs. In the last 24 hours, aides to the US leader have been upbeat about the move, hailing it as ‘Liberation Day‘ for US businesses.
Certainly, Thailand has already been hit by a 25% tariff on steel and aluminium. The kingdom last year exported a not insignificant $500 million in aluminium to the United States.
Indeed, businesses had been expanding substantially before March when the tariffs were imposed.
Thailand faces economic strain as US tariffs on cars and trade deficit pressures threaten key export sectors
Additionally, Thai cars will be impacted starting on April 3rd when a 25% tariff will be in effect for Thailand’s exporters. This is another particularly hard hit for Thailand’s ailing car and manufacturing sector. Last year, the kingdom sent 42,000 cars stateside.
Thailand has been included in the Dirty 15 list by US agencies in the last few weeks. The kingdom has a $45.6 billion trade deficit with the United States. Significantly, with $54.96 billion in exports in 2024, the States is the kingdom’s biggest and indeed most profitable export market.
Meanwhile, Thailand’s government and Ministry of Commerce are anxious to avert further woes. Last year, the country ramped up imports from the United States by 14.7% to $17.7 billion.
On Monday, an affable President Trump hinted that things may not be as bad. In short, he said his administration would be relatively ‘kinder‘ with its trading partners.
Trump hints at a softer stance on Thailand but concerns over harsh US tariffs continue to escalate
Certainly, when asked about Thailand, he said: “You’re going to see in two days, which is maybe tomorrow night or probably Wednesday. We’re going to be very nice, relatively speaking, we’re going to be very kind.”
In the meantime, there were reports over the weekend that aides from China, Japan, and South Korea had helped in discussions. However, on Tuesday, Japan’s trade minister played down the talks. Mr. Yoji Muto told a press conference it was simply an exchange of views. Certainly, there were no substantial discussions.
Thailand is bracing for impact as it ranks 10th on a list of countries that have large trade surpluses with the United States. The US investment bank Goldman Sachs has said Thailand could face tariffs as high as 15-18%, reflecting differences in customs duties (6%), non-tariff measures (3%), and VAT (7%).
Critics warn that Trump’s strategy risks a global trade war, provoking a chain reaction of retaliation by major trading partners like China, Canada and the European Union.
China, Japan and South Korea strengthen trade ties as Trump’s policies spark growing uncertainty
Over the weekend, China, South Korea and Japan agreed to strengthen free trade between themselves.
Trump’s trade policies are proving more aggressive and unpredictable than anticipated. His administration’s approach to the reciprocal tariffs initially appeared to factor in not just tariff differentials but also non-tariff barriers and value-added tax (VAT) disparities.
However, in a characteristic display of unpredictability, Trump recently suggested the April tariffs might be more lenient, excluding non-tariff barriers such as VAT, wage suppression and alleged currency manipulation from the retaliatory tariff calculations.
This announcement has given markets a modest reprieve, though uncertainty remains the dominant sentiment.
Global instability grows as Trump’s trade policies fuel economic volatility and market disruptions
Meanwhile, Liberation Day on Wednesday is threatening to be another historic day. Indeed, Trump’s presidency since January 20th has stirred the world with instability. Undoubtedly, the world is realigning, with no one sure of what the ultimate outcome will be.
In the meantime, as if to confirm this, gold has risen. On Tuesday, it reached $3,148.88 a troy ounce, a full 19% rise since the start of 2025.
The impact of Trump’s trade actions is already visible in global economic indicators. The US manufacturing purchasing managers’ index (PMI) has retreated to 49.8 from 52.7, reflecting contraction as rising raw material costs from import tariffs begin to bite. Consumer confidence in America has plummeted to its lowest level since January 2021.
Thailand braces for economic downturn as US tariffs threaten to slow growth and disrupt key industries
For Thailand, the stakes are particularly high. If the United States imposes a 6% tariff on Thai exports, one estimate is it could slow GDP growth by over 0.5 percentage points.
However, under the more severe scenario where tariffs reach 15-18%, GDP growth could decline by 1 to 1.5 points from our baseline 2.5% projection.
Trump’s trade war coming down hard on Thailand despite reports of talk. Reciprocal tariffs days away
Rising optimism Thailand can do a deal with the United States to avoid the April 2nd worldwide reciprocal tariffs regime
Thailand waits for new Trump reciprocal trade tariffs to be launched within hours from the White House
Amid this challenging landscape, the Thai stock market has suffered, declining 15% year-to-date, the worst performance among global stock markets. Nevertheless, analysts see the potential for a rebound, noting that negative factors have largely been priced in.
For instance, China’s economic stimulus measures could positively influence Thailand’s investment climate. Meanwhile, caution should also be exercised about predicting a Chinese recovery.
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Further reading:
Trump’s trade war coming down hard on Thailand despite reports of talk. Reciprocal tariffs days away
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
