US President Donald Trump formally notified Deputy Prime Minister Suriya Jungrungreangkit in an official letter sent on July 7, citing the need to address the trade imbalance between the two countries. The document warned that attempts to route goods through third countries to avoid tariffs would result in additional penalties, reports national government news agency NBT.
The announcement follows earlier discussions between Thai and American officials. In April, Trump introduced a 10% base tariff on imports from countries with trade surpluses with the United States, naming Thailand among those affected, the report said.
Although Thailand received a 90-day extension to avoid immediate enforcement, the country now faces one of the highest tariff rates under the new policy.
Thailand has responded by submitting a revised trade proposal to the United States. Deputy Prime Minister Pichai Chunhavajira stated that the updated offer outlines plans to reduce Thailand’s trade surplus with the US by 70% within five years.
It also includes increased imports of US agricultural, energy, and aerospace products, while minimising disruptions to domestic producers by selecting categories not manufactured in Thailand.
The Thai government has also proposed steps to reduce non-tariff barriers and improve trade procedures. These include streamlining customs processes, opening new investment channels, and encouraging Thai businesses to consider opportunities in the US market.
Negotiations have involved American government agencies, private-sector investors and trade officials on both sides.
President Trump indicated that the 36% tariff could be adjusted depending on Thailand’s future trade policies, the report noted.
Any retaliatory tariffs on US goods would result in added penalties on Thai exports, the report added.
As the new tariff deadline approaches, Thai officials are continuing talks to seek a resolution that protects national interests while maintaining access to key export markets, the report concluded.
LAST MINUTE
Thailand offered to commit to a 20-year liquefied natural gas (LNG) import deal with the United States, and plans to acquire Boeing aircraft over the coming years in the hope of averting a 36% export levy, according to Deputy Prime Minister and Finance Minister Pichai Chunhavajira.
These purchases are part of a broader effort to reduce Thailand’s US$46 billion (B1.5 trillion) trade surplus with the US by 70% within five years, aiming for a full balance within eight years, he said, reported the Bangkok Post.
To sweeten the deal, Thailand also offered to eliminate import tariffs on a wide range of US products, including agricultural and industrial goods, many of which are in short supply domestically.
The initial proposal also outlined a phased reduction of non-tariff barriers.
Mr Pichai said Thailand proposed a 0% import tariff on a number of products for the United States during bilateral tax agreement negotiations held last week.
"The 0% import tariff offer was not applied across the board. However, a considerable number of goods were included under this rate," Mr Pichai said.
"This does not give the US an unfair advantage over our other trading partners. We know which items are acceptable and which are not," he added.
Mr Pichai further explained that, in his view ‒ and seemingly from the US perspective as well ‒ the proposals Thailand presented were constructive. Nevertheless, he declined to disclose details of the discussions at this stage.
He clarified that Thailand’s offer aimed to promote a greater trade balance between the two countries.
"Achieving a trade balance between Thailand and the US requires increased bilateral trade. Whether such a balance is reached in five or 10 years is not the central issue for the US; the real question is how we can expand trade between us," he said.
Mr Pichai said that international negotiations are rarely resolved in a single meeting. “Negotiations evolve gradually. It’s true that there are many countries still awaiting responses, but during this visit, the US side examined our proposals thoroughly,” he noted.
He also said that during his visit, he met with representatives from major US private sector investors in Thailand, all of whom strongly supported his efforts and expressed continued confidence in the Thai market.
“These are significant investors,” he said, adding that he also gained additional insights into the challenges facing the US agricultural sector during the trip.
Mr Pichai further noted that during discussions with the United States Trade Representative (USTR), the Thai proposals were well received.
“They praised our proposals as being well-formulated, but also inquired whether certain elements could be expanded upon. I have since revised and resubmitted an updated proposal to the US,” he said.
Earlier, Mr Pichai told Bloomberg News in an interview on Sunday (July 6) that Thailand was making a last-ditch effort, with offers of greater market access for US farm and industrial goods, along with increased purchases of energy and Boeing jets.
If accepted, Thailand can immediately waive import tariffs or non-tariff barriers for a majority of the products, while phasing out restrictions more gradually for a smaller set of goods, he said.
Addressing concerns over Thailand’s partnership with the Brics group, Mr Pichai expressed confidence that this affiliation would not adversely affect the ongoing trade negotiations with the US.