Latest news with #RegionalValue
Bangkok Post
5 days ago
- Business
- Bangkok Post
Thais will not slash all tariffs on US goods
Thailand will not agree to reduce tariffs to zero on all US goods in ongoing trade talks, as such a move could significantly impact domestic producers and strategic industries, Deputy Finance Minister Paopoom Rojanasakul said. Speaking ahead of a scheduled meeting between the "Team Thailand" delegation led by Finance Minister Pichai Chunhavajira and the Office of the United States Trade Representative (USTR) on Thursday, Mr Paopoom emphasised the need to strike a balance between protecting exporters and safeguarding local producers, including farmers and small businesses. "The winner in negotiations is not the one who gets the lowest tariff, but the one who can maintain the most balanced outcome," said Mr Paopoom. He revealed that current reciprocal tariff rates on Thai exports to the US average around 36%, and discussions are ongoing to secure more favourable terms. However, he warned that any concessions made to reduce US tariffs would inevitably come with expectations for increased market access in return -- something that could pose risks to Thailand's local industries. "It's not just about securing a lower tariff rate," he said. "We must consider the impact on domestic sectors. Nothing comes without a cost. If we want the US to lower tariffs, we must offer access to our markets in exchange." Mr Paopoom stressed that Thailand could not adopt a blanket zero-tariff approach similar to Vietnam's, as this would require full market access for US goods. "We must weigh the benefits against the potential harm. He noted that while the export sector plays a significant role in the country's GDP, the government must also consider the well-being of farmers, SMEs, and domestic livestock producers. "Thailand is not made up of exporters alone. We have to look after all segments of society." The deputy finance minister clarified that strategic products -- those critical to national interests -- would need to be excluded from zero-tariff commitments. Overexposing local markets to foreign goods could disrupt domestic supply chains and damage the competitiveness of Thai producers. In addressing comparisons with Vietnam, Mr Paopoom explained that Vietnam receives two distinct tariff rates under US trade policy: 20% for goods made with domestic or regional inputs that meet Regional Value Content (RVC) requirements, and 40% for those that do not. Given that Vietnam's supply chain is less developed than Thailand's, he noted that a larger proportion of Vietnamese exports are likely subject to the higher 40% tariff. Commerce Minister Jatuporn Buruspat has confirmed that Thailand has offered to reduce import tariffs on tens of thousands of products from the US to zero. Additional proposals have also been submitted. As trade talks continue, the Commerce Minister has instructed relevant agencies to draft contingency plans to mitigate the potential impact of any retaliatory tariffs that may be imposed by the US. Mr Jatuporn said the government is preparing for two scenarios -- one in which Thai goods are subject to a 36% tariff rate and another in which they receive a 20% tariff rate, equivalent to that offered to Vietnam, a regional competitor. Chanintr Chalisarapong, vice chairman of the Thai Chamber of Commerce, told Bloomberg News that Thailand plans to scrap tariffs on 90% of US goods, up from the previous 60%. The proposal, covering 10,000 US products, will be presented to Washington and could reduce Thailand's $46 billion trade surplus by 70% within three years. Final tariffs are expected to fall to 18–20%, he said, adding the plan is more ambitious than previous offers and exceeds commitments by Indonesia and Vietnam, reflecting Thailand's capacity to process and re-export US goods.
Bangkok Post
6 days ago
- Business
- Bangkok Post
Thais will not slash all tariffs
Thailand will not agree to reduce tariffs to zero on all US goods in ongoing trade talks, as such a move could significantly impact domestic producers and strategic industries, Deputy Finance Minister Paopoom Rojanasakul said. Speaking ahead of a scheduled meeting between the "Team Thailand" delegation led by Finance Minister Pichai Chunhavajira and the Office of the United States Trade Representative (USTR) on Thursday, Mr Paopoom emphasised the need to strike a balance between protecting exporters and safeguarding local producers, including farmers and small businesses. "The winner in negotiations is not the one who gets the lowest tariff, but the one who can maintain the most balanced outcome," said Mr Paopoom. He revealed that current reciprocal tariff rates on Thai exports to the US average around 36%, and discussions are ongoing to secure more favourable terms. However, he warned that any concessions made to reduce US tariffs would inevitably come with expectations for increased market access in return -- something that could pose risks to Thailand's local industries. "It's not just about securing a lower tariff rate," he said. "We must consider the impact on domestic sectors. Nothing comes without a cost. If we want the US to lower tariffs, we must offer access to our markets in exchange." Mr Paopoom stressed that Thailand could not adopt a blanket zero-tariff approach similar to Vietnam's, as this would require full market access for US goods. "We must weigh the benefits against the potential harm. He noted that while the export sector plays a significant role in the country's GDP, the government must also consider the well-being of farmers, SMEs, and domestic livestock producers. "Thailand is not made up of exporters alone. We have to look after all segments of society." The deputy finance minister clarified that strategic products -- those critical to national interests -- would need to be excluded from zero-tariff commitments. Overexposing local markets to foreign goods could disrupt domestic supply chains and damage the competitiveness of Thai producers. In addressing comparisons with Vietnam, Mr Paopoom explained that Vietnam receives two distinct tariff rates under US trade policy: 20% for goods made with domestic or regional inputs that meet Regional Value Content (RVC) requirements, and 40% for those that do not. Given that Vietnam's supply chain is less developed than Thailand's, he noted that a larger proportion of Vietnamese exports are likely subject to the higher 40% tariff. Commerce Minister Jatuporn Buruspat has confirmed that Thailand has offered to reduce import tariffs on tens of thousands of products from the US to zero. Additional proposals have also been submitted. As trade talks continue, the Commerce Minister has instructed relevant agencies to draft contingency plans to mitigate the potential impact of any retaliatory tariffs that may be imposed by the US. Mr Jatuporn said the government is preparing for two scenarios -- one in which Thai goods are subject to a 36% tariff rate and another in which they receive a 20% tariff rate, equivalent to that offered to Vietnam, a regional competitor. Chanintr Chalisarapong, vice chairman of the Thai Chamber of Commerce, told Bloomberg News that Thailand plans to scrap tariffs on 90% of US goods, up from the previous 60%. The proposal, covering 10,000 US products, will be presented to Washington and could reduce Thailand's $46 billion trade surplus by 70% within three years. Final tariffs are expected to fall to 18–20%, he said, adding the plan is more ambitious than previous offers and exceeds commitments by Indonesia and Vietnam, reflecting Thailand's capacity to process and re-export US goods.
