Thailand faces economic turmoil as Trump’s 36% tariff looms, threatening up to 5% of GDP. PM Paetongtarn calls an urgent crisis meeting while Vietnam and Cambodia act fast. Opposition slams government confusion, business leaders warn of disaster.
Prime Minister Paetongtarn Shinawatra’s office has confirmed a crisis meeting of top officials on Tuesday next at 1 pm at Government House to discuss the US tariff crisis. It comes as Vietnam’s leader To Lam has already been on the phone with the mercurial US leader. Indeed, President Trump has accepted an invitation to visit Vietnam. Meanwhile, Vietnam has offered to reduce its tariffs to zero, while neighbouring Cambodia has ordered a reduction to 5% across 19 different import sectors. However, opposition leaders have criticised a confused government response since Thursday morning. Meanwhile, the Federation of Thai Industries (FTI) is warning that up to 5% of GDP is at risk of being wiped out by the threat.
A war of words has broken out between the opposition and the government over the US tariff bombshell. It comes as industry leaders, particularly the Federation of Thai Industries (FTI), have issued a warning.
In brief, the 36% tariff which will be applied on all Thai imports stateside on April 9th will be disastrous.
On Saturday, FTI President Kriengkrai Thiennukul warned that export losses could be ฿800 billion or even ฿900 million. Certainly, that is nearly 5% of Thailand’s GDP. Such an action, in addition to intensified dumping from China, would send Thailand careening into recession.
Opposition hits out at conflicting messages as government defends pre-inauguration task force
At the same time, on Saturday, opposition spokesperson Sirikanya Tansakul lambasted the government. She decried the confused messages coming from ministers since the tariff was announced on Wednesday in Washington DC or early Thursday morning.
In particular, she criticised the fact that Minister of Finance Pichai Chunhavajira proposed holding talks in Washington DC while the Prime Minister mentioned a task force.
However, on Saturday, in a hard-hitting response, Government House spokesman Jirayu Huangsap pointed out that it was Ms. Sirikanya who was out of touch. Indeed, the PM had already set up a task force of government department chiefs and key advisors on January 6th, even before President Trump was inaugurated.
Previously, on Thursday evening and Friday, the Minister of Finance stated plainly that Thailand must purchase more food and products from the United States, including Harley-Davidson motorbikes. At the same time, it must reduce its tariffs.
US trade formula shocks Thai officials as experts admit American complaints may be partly justified
Analysts have pointed to the foundation behind the 72% charge that the Trump administration claims Thailand is charging on US exports. Significantly, US officials have admitted that the figure is a calculation of Thailand’s trade surplus with America divided by its export volume.
Indeed, that would appear to be correct, as $45.6 billion divided by $63.3 billion arrives at approximately 72%.
Nonetheless, some industry figures on Friday accepted that Thai tariffs on US imports were steep. Additionally, there were various trade restrictions and other practices as well as taxes. In short, the US viewpoint may not be the ‘nonsense’ described earlier by some international analysts.
Certainly, this is the attitude of many seasoned trade experts. In effect, they are left facing a US mechanism that links a deficit with any country to higher tariffs.
Thai tariffs on food, vehicles, and alcohol come under scrutiny amid talks and internal confusion
For instance, Thailand charges high tariffs on US beef, pork, poultry, and dairy. It also imposes high taxes on processed food and US cars and motorbikes. Indeed, tariffs on alcoholic beverages and wines are at 400%. Meanwhile, there are restrictions on the import of beef slaughtered for over 30 months and bans on beef and poultry enhanced by chemicals.
Later, Prime Minister Paetongtarn Shinawatra confirmed that all officials dealing with the US tariff situation will meet on Tuesday. After Thursday’s early morning bombshell, she asked all parties to review the situation and report to Government House on April 8th.
The meeting will be convened at 1 pm at the Thai Khu Fah Building at the Government House complex.
At the same time, it is not known if Prime Minister Paetongtarn has reached out to the Trump White House. On Friday, a top official at the Ministry of Commerce said he had tried to make contact but was unable to get through.
Vietnam and Cambodia move fast on tariff talks as Thai business leaders grow increasingly anxious
Meanwhile, in contrast, both Vietnam and Cambodia have taken action. The Secretary-general of Vietnam’s Communist Party spoke with President Trump. Indeed, the US President went on social media to say he had accepted an invitation to visit the country.
“I would like to thank To Lam on behalf of his country. I also told him that I look forward to meeting him in the near future,” Trump said.
He described the talk with Vietnam’s leader as ‘very good’. Furthermore, he confirmed that Vietnam had offered to reduce all its tariffs to zero.
At the same time, Cambodia’s Prime Minister Hun Manet penned a letter to President Donald Trump. In it, he committed to reducing Canadian tariffs on 19 sectors to just 5%. Later, he published the letter on Facebook.
Meanwhile, business leaders are frustrated as they see the government only meeting to review Trump’s tariffs on the day before they are to go into effect. In the meantime, some analysts are warning that Thailand could find itself locked out.
Impact estimates diverge as GDP loss from tariffs may reach 4.86% according to the top Thai industry body
In brief, they suggested that with other large economies maintaining ties with Trump, massive damage may be inflicted.
Koraphat Vorachet, an assistant managing director and division head of research at Krungsri Securities (KSS), said, “Thailand is among the Asian countries moderately affected by the tariff. While Japan, South Korea, Indonesia, and India can bargain with the US to lower tariff rates, I don’t think Thailand has much capacity to do so.”
Nevertheless, Mr. Koraphat’s estimate of the impact of the tariffs was mild. He suggested a GDP impact of only 0.6% to 1.2%.
In contrast, the upper-end figure mentioned by Kriengkrai Thiennukul, Federation of Thai Industries (FTI) president on Saturday, was ฿900 million or $25.71 billion. Basically, 40.6% of Thailand’s exports to the United States last year.
In turn, this would equate to 4.86% of Thailand’s 2024 GDP, which was $528.92 billion.
Certainly, the stakes are very high. In addition, the economy may also be hit by reduced income for factory workers and the potential effects of these worldwide tariffs trickling into foreign tourism.
US-Thai defence deals and trade-offs under scrutiny as China slaps its own tariffs and restrictions
In addition to purchasing food, some analysts have suggested that Thailand could purchase US armaments, in addition to Thai Airways ordering new Boeing jets.
In addition, it also raised questions about the Royal Thai Air Force’s decision some months ago to shun an offer from the United States. The was a loan package in a sweetener to buy top-notch US F-16 fighter jets.
Instead, Thailand opted for Swedish Gripen fighters. It already has 15 of these jets, while it has 50 US F-16s. The American offer was for updated F-16 Block-70 jets and a new control interface and communications system.
In addition, the proposal made by US envoy Robert F. Godec to Air Force top brass offered an extended lobby facility. The interest rate was at 3.5%, with an extended repayment plan.
The Air Force previously had said it had a $19 billion budget.
Meanwhile, China, like Canada and Mexico, is rebuffing the US move. On Thursday, it unveiled a 34% tariff rate on all American imports from April 10th. In addition, it restricted the export of a range of materials, including rare earths.
China accuses US of breaching WTO rules as Beijing sets harsh tone with new export controls and tariffs
The Ministry of Foreign Affairs and Finance Ministries in Beijing made the Communist country’s position clear. Both the tone and content of the message were hostile.
Indeed, it comes with reports that US President Trump has not spoken to the Chinese leader since returning to the Oval Office.
China accused the United States of derailing World Trade Organization (WTO) rules and an established trading order. It said America had become an international bully and called for negotiations between the US and other countries as equals.
Finance Minister to travel to the US to import more US food and motorbikes while lowering Thai tariffs
Trump stuns Thailand with a shocking 36% tariff on all imports to the US. GDP growth faces a wipe-out
“The purpose of China’s export control of related goods in accordance with the law is to safeguard national security and interests. In addition to complying with international obligations, such as not being weapons of attack,” a spokesperson said. “US reciprocal tariff measures are a serious violation of the rules of the World Trade Organization (WTO). Certainly, it damages the rights and interests of WTO member states. It also undermines the rules-based multilateral trading system and international economic and trade order.”
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Further reading:
Finance Minister to travel to US to import more US food and motorbikes while lowering Thai tariffs
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
