Thailand has shared an updated trade proposal with the United States to avoid a potential 36% tariff on its exports, according to Finance Minister Pichai Chunhavajira. In an interview with Bloomberg News, he explained that the plan aims to strengthen bilateral trade and reduce Thailand’s $46 billion trade surplus with the U.S. by 70% over five years, with hopes of achieving a balanced trade relationship within seven to eight years.
This development comes as the 90-day tariff pause—capping rates at 10% for most countries—approaches its end on July 9. Thailand, a vital exporter in Southeast Asia, faces serious economic risks if the tariff is implemented, since the U.S. is its largest market, making up 18.3% of shipments worth $55 billion in 2022. The trade deficit, reported at $45.6 billion, has led to urgent discussions.
Pichai is optimistic about securing a tariff rate somewhere between 10% and 20%, ideally around 10%. The proposal also includes better access to the U.S. market, stricter rules to prevent transhipment through third countries, and increased imports of American goods, like natural gas and agricultural products. These efforts aim to make Thailand’s trade terms more competitive and help cushion the economic impacts, which could include a 1% dip in GDP growth.
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Recent meetings in the U.S., including talks with U.S. Trade Representative Jamieson Greer and Deputy Secretary of the Treasury Michael Faulkender, provided valuable feedback. Pichai highlighted Thailand’s long-standing partnership with the U.S. and expressed confidence that the revised proposal, submitted before the deadline, will lead to outcomes that benefit both countries.
