BANGKOK — Deputy Prime Minister and Finance Minister Pichai Chunhavajira expressed confidence that Thailand can negotiate a US tariff deal below 36% before the August 1 deadline, stating the government has contingency plans ready if negotiations fail.
Thailand faces a 36% tariff on goods exported to the United States under new trade measures announced by President Donald Trump on July 7. He announced the tariff rates by posting letters on Truth Social addressed to leaders of the affected countries. The letters warned against retaliation through increased import taxes, threatening even higher U.S. tariffs in response.
In the letter of President Donald Trump, the 36% tariff will apply to “any and all Thai products sent into the United States” starting August 1, separate from existing sectoral tariffs. Trump characterized this rate as “far less than what is needed to eliminate the Trade Deficit disparity” between the two countries.
The letter warns that any retaliatory tariff increases by Thailand will be added directly to the 36% base rate, creating a potential spiral of trade restrictions.
Trump offered an exemption path, stating there will be “no Tariff if Thailand, or companies within your Country, decide to build or manufacture product within the United States,” promising rapid approval processes “in a matter of weeks.
Thailand’s Strategy and Position
Responding to the tariff threat, Pichai speaking at Government House on Tuesday morning, emphasized that Thailand’s proposal aims to achieve competitive parity with trade competitors, noting that the 36% rate doesn’t apply universally and can be adjusted by product category.
The US has announced 2-3 categories for different countries: those with suitable existing rates will maintain the status quo, countries exceeding 40% will see reductions to 40%, while nations like South Korea and Japan that previously submitted proposals will be regrouped for reassessment.
“Therefore, we need to work harder during this period,” Pichai said. He is confident that the tax rate will put Thailand in the same group as our trade competitors, allowing Thai exports to compete. As for the new proposals Thailand had submitted, such proposals typically contain many items, and FTAs (Free Trade Agreements) already cover them at a 0% rate.
BRICS Partnership Clarification
Addressing concerns about Thailand’s BRICS partnership status potentially affecting US relations, Pichai dismissed such worries, explaining that Thailand joined as an observer to learn and must maintain relationships with all parties in an evolving global landscape.
Negotiation Approach and Timeline
When pressed about specific timelines, Pichai acknowledged that the US will determine the response schedule, emphasizing that while Thailand cannot set deadlines, the government remains committed to continuing negotiations through the August 1 deadline.
The government has developed comprehensive contingency plans regardless of the final tariff outcome, including support measures for affected businesses and utilizing various funding sources beyond economic stimulus budgets. Acknowledging stock market concerns, Pichai noted that similar situations affect all US trading partners and stressed the importance of clear communication to restore investor confidence.
