Finance Minister of Thailand urgently working to complete proposed US tariff plan before August 1st deadline
In a significant move towards strengthening trade relations, Thailand's Finance Minister, Pichai Chunhavajira, has submitted the revised tariff proposal to the United States by the August 1, 2025 deadline. The proposed tariff rate reduction, set to take effect on the same day, will see Thailand's reciprocal tariff on US goods decrease from 36% to 19%.
The minister called the revised GDP forecast a positive signal, reflecting a gradual recovery, despite ongoing risks. He acknowledged that the matter is delicate but assured that they are doing what they can to secure a favourable outcome.
The minister has been in constant contact with US counterparts regarding the proposal. He responded to the US's earlier feedback on the proposal on July 29, and the final version of the proposal is expected to be submitted by July 30.
Thailand's concessions in the revised proposal are substantial. The country has agreed to near-total tariff exemptions on over 10,000 US import items, focusing on products not well produced in Thailand, such as medical devices, automotive components, and specialized foods. Additionally, non-tariff barriers have been reduced, facilitating faster customs clearance and lowering costs for US goods in Thailand.
Investment openings and incentives in Thailand’s Eastern Economic Corridor (EEC) have also been offered, targeting clean energy, semiconductors/ICT, and logistics sectors to attract US investment.
The Thai government is implementing financial measures to support private exporters, especially SMEs linked to US supply chains. A 157 billion baht economic stimulus plan has been announced, aimed at increasing liquidity and reducing trade-related financial burdens.
This tariff revision is part of a broader US strategy under Executive Order 14257, aimed at rectifying trade imbalances and protecting US economic and national security interests. The reduction in reciprocal tariffs to 19% for Thailand marks a compromise balancing US trade enforcement with Thailand’s export interests.
The minister acknowledged that there is no guarantee that the US will respond in time. However, he remains optimistic about the potential benefits this revised tariff deal could bring to Thailand's economy, despite the remaining trade friction impacts.
Sources: 1. Thai Finance Ministry 2. Thai Customs Department 3. ASEAN Briefing 4. White House
- The revised tariff proposal by Thailand's Finance Minister, Pichai Chunhavajira, includes substantial concessions, such as near-total tariff exemptions on over 10,000 US import items, particularly focusing on medical devices, automotive components, and specialized foods.
- In the broader US strategy under Executive Order 14257, the tariff revision for Thailand is aimed at rectifying trade imbalances and protecting US economic and national security interests, with the reduction in reciprocal tariffs to 19% marking a compromise between US trade enforcement and Thailand’s export interests.
- The Thai government, in an effort to strengthen the local economy, has announced a 157 billion baht economic stimulus plan, targeting private exporters, especially SMEs linked to US supply chains, to increase liquidity and reduce trade-related financial burdens.
- The Minister of Finance has responded to the US's earlier feedback on the tariff proposal and anticipates the final version of the proposal to be submitted by July 30, with potential benefits for Thailand's economy, despite the remaining trade friction impacts. However, he acknowledges that there is no guarantee that the US will respond in time.
