United States and Thailand Discussing Rapid Tariff Agreement, Indicating Potential Aircraft Buys
Thailand optimistic about resolving customs duties with US within weeks
Thailand's Finance Minister, Pichai Chunhavajira, remains hopeful that a resolution regarding customs tariffs between Thailand and the United States will be reached within the coming weeks.
Pichai expressed readiness for further talks following continuous engagement at the working group level, suggesting that Thailand's proposal to the US may include purchasing new aircraft as part of a significant plan to replace aging planes.
Speaking as the head of the Thai-US tariff negotiation team, Pichai told Krungthep Turakij that clarity on US customs tariffs for Thailand is anticipated within "one to two weeks." This statement was made after Thailand submitted a formal proposal to the US, which has led to ongoing working-level discussions.
Official negotiations are likely to follow, with Thailand fully prepared to ensure its offer receives serious consideration. Pichai explained that initial discussions centered around clarifying the situation directly with relevant US agencies. His intention was to convey that Thailand's trade surplus with the US is not unusual, partly due to investments by US companies in Thailand that produce and export goods back to the US, as well as other factors influencing the trade balance.
In addition, Thailand is actively working to improve internal regulations to prevent potential loopholes. This involves reviewing and adjusting rules related to the proportion of domestically produced raw materials and parts—referred to as "Local Content"—and implementing more stringent measures to prevent fraudulent export claims.
Thailand has also expressed its readiness to increase purchases of goods from the US, particularly those where it faces shortages and the US offers competitive prices. This includes agricultural products, with discussions taking place between Thai producers and the government regarding increased demand.
The ongoing trade talks between Thailand and the US are a significant concern due to the potential negative economic impacts on Thailand if US tariffs remain high. Experts predict that higher US tariffs could reduce Thai industrial exports significantly and slow GDP growth due to trade impacts.
In the broader context, these tariffs are part of President Donald Trump's efforts to raise import tax revenues to address the US fiscal deficit. The enforcement of these tariffs on Thailand was initially set at 36%, but has been delayed until July 2025, providing a window for negotiations.
However, Thailand is not currently prioritized in the US negotiation schedule, unlike other ASEAN economies such as Vietnam, Indonesia, Malaysia, and Cambodia.
The final tariff rate and trade policy direction should become clearer after July 2025, with the aim of possibly reducing tariffs to a range between 10-20%.
In conclusion, Thailand’s tariff negotiations with the US are complex, with no immediate resolution in sight regarding tariffs or specific deals such as aircraft purchases. The economic and trade concerns within Thailand persist as negotiations remain ongoing.
- As the trade talks between Thailand and the United States continue, Thailand's Finance Minister, Pichai Chunhavajira, is actively seeking to invest in new aircraft as part of a larger plan to replace aging planes, which could potentially improve the business and financial sectors.
- Pichai emphasized that Thailand's trade surplus with the United States is not unusual, stemming in part from investments by US companies in Thailand's business landscape, thereby contributing to the economy and finance sector.
- Thailand is also actively working to improve its internal regulations to prevent potential loopholes, especially related to the "Local Content" rules, which could have a positive impact on investing and finance within the country.
- The ongoing trade negotiations between Thailand and the United States have significant implications, as higher US tariffs could negatively impact Thailand's stock market, economy, and finance sector by reducing industrial exports and slowing GDP growth.
