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Bangkok Post
4 days ago
- Business
- Bangkok Post
Thai exports face ‘severe harm' if high tariff sticks
Thai exports could contract in the second half of this year if the United States imposes a 36% tariff rate starting next month, business leaders said on Tuesday. Starting on Aug 1, Washington plans to impose a 36% tariff on all Thai products, separate from sectoral tariffs, according to a letter signed by President Donald Trump and issued on Monday. Finance Minister Pichai Chunvajira said the letter was sent before US officials had seen a revised proposal from Thailand, and he expressed optimism that Thai negotiators could get the tariff rate reduced. Dhanakorn Kasetrsuwan, chairman of the Thai National Shippers' Council, said a 36% tariff could severely harm Thailand's export market, particularly as nations such as Vietnam (20%) and Malaysia (25%) currently have significantly lower rates. This could diminish Thailand's competitiveness, leading to a shift in orders to those countries, he said. Moreover, high tariffs could deter foreign investment, with potential investors opting for locations such as Vietnam or Malaysia due to unfavourable tariff conditions in Thailand, said Mr Dhanakorn. He urged the government to study Vietnam's approach, which quickly led to an agreement with Washington, in part by agreeing to eliminate tariffs for all US products as Hanoi did. Mr Dhanakorn said the government must develop a model that equally engages both China and the US, while exploring the possibility of offering zero tariffs on US products. 'A 36% tariff will definitely affect Thai exports, potentially causing them to contract in the latter half of the year. The severity of the downturn will depend on how much higher Thailand's tariffs are compared with those of competitors,' he said. Mr Dhanakorn said the speed at which competitors can replace Thai export orders to the US will be another important factor. The United States accounts for more than 18% of all Thai exports by value. The government must weigh the long-term impact on Thai exports, looking beyond the immediate effect on orders, he said. Poj Aramwattananont, chairman of the Thai Chamber of Commerce and the Thai Board of Trade, said Thailand's negotiating team should promptly revise its proposals for US review, as the tariff enforcement has now been postponed to Aug 1. The government is planning a meeting on Wednesday on tariffs with the Joint Standing Committee on Commerce, Industry and Banking, according to Mr Poj. Commerce Minister Jatuporn Buruspat said the ministry would have discussions with related industries to evaluate the impacts and plan appropriate countermeasures. 'The export structure will inevitably change regardless of the tariff rates,' he said. 'We will explore various strategic models, including the possibility of reducing tariffs on US products to zero.' Team Thailand and relevant ministers have a meeting planned at Phitsanulok Mansion on Friday for further discussions.
Bangkok Post
5 days ago
- Business
- Bangkok Post
Thai businesses come out in support of US tariff deal
The private sector supports the revised US tariff proposals and expects a mutually beneficial outcome, says the Thai Chamber of Commerce. Thailand's latest proposal aims to boost bilateral trade volume and reduce Thailand's US$46 billion trade surplus with the US by 70% within five years, with a balance expected in 7-8 years, according to Finance Minister Pichai Chunhavajira. He said the government offered zero tariffs on some US products as part of the new trade proposals. Poj Aramwattananont, chairman of the chamber and the Thai Board of Trade, said the private sector accepts the revised conditions, which include increased purchases of energy and Boeing jets, as well as greater market access for US products. "We expect the US will accept Thailand's proposals, leading to a fair tariff rate that will not disadvantage Thai businesses in comparison with other countries. We want to see mutually beneficial results for both countries," he said. Mr Poj said imposing the initially proposed 36% tariff on Thai products would have severely harmed the Thai economy. "We need to wait for clarity from the US government," he said. Regarding market access for US products and cutting the import tariff to zero, Mr Poj said he anticipated this privilege might not apply to all products. Commerce Minister Jatuporn Buruspat said the ministry is preparing business relief measures in response to the US tariffs, following the submission of revised proposals. He said these measures will be delivered via a relief fund aimed at supporting businesses affected by the potential tariff increases, along with providing soft loans. The government reserved 10 billion baht from its economic stimulus package of 115 billion baht for this purpose, said Mr Jatuporn. "We will engage with all relevant stakeholders and plan to finalise the relief measures as soon as possible. Once concluded, we will present these measures to the cabinet for budget approval," he said.
Bangkok Post
01-07-2025
- Business
- Bangkok Post
Problems pile up for beleaguered cabinet
The private sector is urging the new cabinet to urgently address economic and agricultural challenges. Poj Aramwattananont, chairman of the Thai Chamber of Commerce and the Thai Board of Trade, said the new cabinet must tackle pressing issues related to the economy, society and security. "They must dedicate their efforts to addressing economic challenges and export concerns, especially given the uncertainty surrounding the outcome of tariff negotiations with the US," he said. Mr Poj said he expects the conflict between Thailand and Cambodia to eventually be resolved, allowing for trade relations to normalise and border security to return. Another concern is the decline in agricultural product prices, as he said the government should work to lower production costs and enhance farming productivity. Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said the agricultural sector should increase its investment in R&D, particularly in crop variety innovation. He said he was disappointed that previous administrations simply proposed the same policies focusing on financial aid for farmers, while failing to introduce any groundbreaking strategies, which has left the agricultural sector stagnant. In addition, Mr Chookiat said he hopes the new commerce minister will inspire civil servants to take a more proactive approach for exports. To enhance rice trading amid challenging conditions, he called for increased marketing and promotion of Thai rice, as export prices are not considerably higher than those of competitors. For instance, Thai rice is priced at US$380 per tonne, while Vietnam's is at $390 and India's at $375. Visit Limlurcha, president of the Future Food Trade Association of Thailand, said the new cabinet needs time to prove itself, with the younger ministers hopefully offering fresh ideas. Mr Visit said he expects the new commerce minister to expedite efforts to increase exports in the latter part of the year. "The private sector is ready to collaborate with the government and the new commerce minister," he said. "The minister must quickly engage with pressing issues, as there's no time for a honeymoon period." Sorathep Rojpotjanaruch, head of the Restaurant Business Club, said while restaurateurs face rising raw material costs, there has been a decline in agricultural production at farms. He urged the commerce minister to use market mechanisms and resolve the unusual price mismatches along the supply chain. In addition, Mr Sorathep called upon the finance minister to establish a dedicated taskforce to tackle the sluggish economy, highlighting the absence of such a team. He advocated for the revival of the "Khon La Khrueng" (half-half) scheme, which provides a 50% co-payment subsidy, which should benefit small vendors in the industry. Mr Sorathep also called for the government to introduce a tax rebate scheme for individuals dining at registered value-added tax restaurants, allowing them to use receipts for tax rebates. He said businesses can qualify for this scheme to help reduce corporate taxes. The sluggish economy has also affected operators in the creative industry, according to the Publishers and Booksellers Association of Thailand (Pubat). Theerapat Charoensuk, a member of Pubat's executive committee, said the government must improve the country's economy to better support the creative sector, particularly the book industry, which is struggling due to reduced consumer purchasing power. Although the government has initiated support for creative industries through its soft power policy, he said a strong economy is vital to support the growth of the creative sector.
