Thailand's Economic Challenge from US Tariffs

The Federation of Thai Industries (FTI) warns of a potential 900 billion baht (US$25.8 billion) revenue loss due to the US administration's new 36% reciprocal tariffs on Thai exports. This move could significantly impact Thailand's economy, especially in key sectors.

Industries Most Affected

Automotive, food, plastic, chemical, steel, aluminium, textile, electronics, and machinery industries are expected to bear the brunt of these tariff increases. The automotive sector, already facing a 25% tariff since March, might see manufacturers relocating production outside Thailand if the additional 36% tariff is imposed.

Tourists walk past the Grand Palace in Bangkok, Thailand. Photo by Reuters

Impact on Food and Chemical Exports

The food industry, particularly processed food and seafood, currently exempt from tariffs, will face direct challenges, reducing Thailand's competitiveness. Similarly, chemical exports to the US, valued at about $2 billion, are expected to decline, with US buyers possibly shunning Thai textiles due to higher costs.

Proposed Solutions

The FTI urges the Thai government to accelerate negotiations with the US to reduce import taxes on US products and consider issuing certificates of origin for Thai-manufactured goods. Additionally, addressing intellectual property infringement and market dumping is crucial to safeguarding Thailand's economic interests.