logo
Thailand to offer ‘no tariffs on 90% of US goods'

Thailand to offer ‘no tariffs on 90% of US goods'

Bangkok Post6 days ago
Thailand is ready to offer scrapping tariffs on 90% of US goods, up from 60% in an earlier proposal, in a bid to avert a punishing 36% levy threatened by President Donald Trump, according to a business group advising Thai negotiators.
The government's third proposal would potentially eliminate tariffs and non-tariff barriers on about 10,000 US products, Chanintr Chalisarapong, vice-chairman of the Thai Chamber of Commerce, told Bloomberg News in an interview on Thursday.
He added that he expects the final tariff on Thailand will be set in a range of 18% to 20% — down from Trump's most recent threatened level of 36%.
The new proposal, which was to be presented to Washington during a conference call scheduled for Thursday night, could reduce Thailand's $45.6-billion trade surplus with the US by 70% within three years and lead to balanced trade within five years, according to Mr Chanintr.
The new figures are even more ambitious than Thailand's July 6 offer to cut tariffs on over 60% of products and eliminate the trade gap in seven or eight years.
'I expect our proposal to be solid and practical. The numbers should be satisfactory to the US,' said Mr Chanintr, who has consulted with negotiators led by Finance Minister Pichai Chunhavajira over the past week to finalise details.
'What we'll be offering is potentially more than Indonesia and Vietnam,' he said. 'Since we're a manufacturing country, we have potential to use a lot more US goods and process them into products that we can export.'
Thailand is one of the Southeast Asian countries racing to finalise terms with the US. Failure to secure a reduced tariff with its largest export market, which accounted for about 18% of Thailand's total shipments last year, could result in a sharp decline in merchandise shipments and shave as much as one percentage point off its projected export-driven economic growth.
Trump has announced deals for 20% tariffs on Vietnamese goods and 19% for Indonesia, though transshipments through both countries would face higher levies.
Bangkok rushed to sweeten its proposal after Trump announced last week that the 36% tariff level on Thailand would start Aug 1. Mr Pichai, who had submitted a second proposal by then, said he was shocked and had been expecting a lower number.
Thailand's new proposal may also include a tax exemption for US digital services that operate in Thailand or serve Thai customers, Mr Chanintr said.
As well, it may also pledge more imports of liquefied natural gas, Boeing planes, and key US food and agricultural products. The latter could include corn, soybeans and barley, which are important to Trump voters in rural states, he added.
Cheap US food and farm products are expected to help cut costs for the Thai pet food industry, which exports heavily to other countries. Lower costs for Thailand's animal feed industry will also likely boost productivity for the domestic poultry, livestock, and food-processing industries down the value chain, Mr Chanintr said.
Mr Pichai, who has said he was pushing for a best-case rate of 10%, is expected to hold more talks with US Trade Representative Jamieson Greer. In their meeting in Washington earlier this month, Mr Pichai agreed to cut import taxes for US products that are in short supply in Thailand and tighten rules to prevent transshipments.
'We'd like for talks to conclude soon so that trade can continue. There's been too much uncertainty,' Mr Chanintr said, adding he is confident Thailand can secure a deal before Aug 1. 'We're so close to the finish line.'
Thai growth is already under pressure from Southeast Asia's highest household debt and sluggish domestic consumption. A favourable deal would also ease investor concerns stoked by political turmoil following the court-ordered suspension of Prime Minister Paetongtarn Shinawatra over alleged ethical misconduct in handling a border dispute with Cambodia.
Thailand's exports rose about 15% in the first five months of the year, driven largely by frontloading during the 90-day pause to allow tariff talks.
'This is a global trade war, not a bilateral one,' Mr Chanintr said. 'Don't forget how high the stakes are.'
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

AIS partners with top business news networks
AIS partners with top business news networks

Bangkok Post

time20 minutes ago

  • Bangkok Post

AIS partners with top business news networks

Advanced Info Service (AIS) continues to strengthen its leadership in delivering premium content through the addition of global in-depth news channels to AIS Play, Thailand's leading video platform. The company has announced new partnerships with world-renowned business news networks, including Bloomberg Television, Fox Business and Fox News Channel, aligning with its strategic move to cater to Thai audiences seeking timely and comprehensive access to economic, financial, capital market, investment and international political news, as well as in-depth expert analysis from across the globe. Customers who subscribe to the Play Family package on AIS PLAY -- starting from 119 baht a month -- can enjoy this content across all devices: smartphones, tablets, smart TVs and the AIS Playbox set-top box. Bloomberg Television provides global business, finance and market news, with expert hosts covering various regions including Asia, Europe and the Middle East. The channel offers neutral, in-depth reporting and accurate real-time updates from around the world. Fox News Channel delivers comprehensive news coverage, analysis, and opinion with a diversity of opinions. As the top-rated television news network in the US for over 20 consecutive years, Fox News offers new perspectives to Thai viewers. Fox Business is a dedicated financial news channel providing real-time market updates across multiple platforms, with a strong focus on Wall Street and other major markets. Based in New York -- the business capital of the world -- Fox Business delivers insights that directly impact viewers' financial lives.

Susco, Asia Green Energy bullish on EV industry
Susco, Asia Green Energy bullish on EV industry

Bangkok Post

timean hour ago

  • Bangkok Post

Susco, Asia Green Energy bullish on EV industry

An oil retailer and a coal trading firm are expecting to rack up significant revenue from their newly-developed electric vehicle (EV) businesses, which are said to be increasingly disrupting sales of fossil fuels. Local oil retailer Susco Plc and Thai coal trader Asia Green Energy Plc believe the EV industry offers bright prospects, though the domestic automotive market has remained sluggish, attributed mainly to prospective buyers' difficulties in accessing auto loans. Susco has been a sales agent of EVs under the BYD brand since the second half of 2023 while Asia Green Energy has been leasing MG cars to taxi drivers since early this year. Asia Green Energy has also expanded its business by setting up AGE Auto Gallery as a distributor of several EV brands, including Zeekr, Omoda & Jaecoo and Mitsubishi. Chaiyrit Simaroj, managing director and chairman of the Susco board, is aware EV sales have been affected by banks' stricter criteria in granting loans amid a high level of household debt and a price war, but the market should improve in the second half of this year. "The price war is becoming less severe and I believe it will not recur," he said. Though some Chinese EV makers have resorted to cutting the prices of their vehicles in a bid to stimulate sales, this has made prospective buyers reluctant to purchase new cars because they anticipate that prices may continue to fall. This may cause manufacturers to reconsider their pricing tactic, according to business leaders in the EV industry. The household debt issue is a major cause behind banks and car financing companies' cautious approval of loans for fear of non-performing loans. According to the Bank of Thailand, household debt continues to decline, falling to 87.4% of GDP in the first quarter of 2025, attributed to weaker loan demand from borrowers and stricter lending standards from financial institutions. Household debt stood at 88.4% of GDP in the previous quarter. Mr Chaiyrit expects Susco to double its sales of EVs to 4,000 units this year, up from 2,000 units in 2024. "Domestic oil prices remain high. This is a positive factor for EV sales," he said. Last year Susco set a sales target of 3,200 units but ended up selling only 2,000 units, mainly because of the price war and fewer auto loans. Asia Green Energy also believes total revenue from EV businesses will reach 10 billion baht by 2030.

Will Indonesia regret its trade deal with Trump?
Will Indonesia regret its trade deal with Trump?

Bangkok Post

timean hour ago

  • Bangkok Post

Will Indonesia regret its trade deal with Trump?

Be careful what you wish for, lest it come true. That ancient proverb comes to mind when considering the eagerness of America's trade partners around the world to negotiate deals with US President Donald Trump's administration. Four countries already have, with Indonesia the latest to do so -- and possibly the first to regret it. The United States has announced a complex, tiered tariff regime, including a 25% tariff on labour-intensive goods such as textiles and footwear, a 40% tariff on goods suspected of being "transshipped" or having content of Chinese origin, and a 50% tariff on so-called "strategic sectors", including aluminium, copper, semiconductors, and pharmaceuticals. An additional 10% levy applies to exports from Brics countries (including Indonesia). Countries might also face anti-dumping duties, which are often steep, politically driven, and inconsistently applied. While these measures hurt US importers and consumers the most, they also significantly heighten uncertainty for exporters. By guaranteeing that Indonesia will not face tariffs exceeding 19% on its exports to the US through 2029, its new agreement with the US seems to mitigate this uncertainty, providing a level of protection against Mr Trump's tariff escalations. Indonesia can now rest assured that it will not face the kinds of extreme tariffs to which China has been subjected. Indonesia's government argues that such a deal was essential because even though the US accounts for only 9.9% of Indonesia's total exports, the trade relationship is disproportionately important. Indonesian exports to the US -- including apparel, footwear, furniture, rubber products, and integrated circuits -- are labour-intensive, they note, and thus support a substantial number of jobs. But these sectors may remain vulnerable to higher tariffs. As it stands, it is not clear whether the 19% cap applies to all Indonesian exports, or if some products -- particularly those containing Chinese inputs -- could still be subject to steeper duties. In any case, 19% tariffs are very burdensome, and Indonesia has also agreed to impose no tariffs on US goods. At best, the deal reduces losses; it does not deliver gains. Moreover, to secure this dubious victory, Indonesia reportedly agreed to purchase 50 Boeing aircraft and commit to importing US$15 billion (484.8 billion baht) worth of US energy products (nearly 40% of Indonesia's total energy imports) and $4.5 billion worth of American agricultural products. But many important questions remain unanswered. How will these purchases be financed, and on what terms? What are the specifications, unit costs, and delivery timelines? Who will oversee procurement, and how will transparency be ensured? Most importantly, if these exchanges are merely political gestures, they could turn out to be economically damaging. The use of jets from Boeing, which has faced a string of quality and safety scandals in recent years, could create considerable risks for Indonesia's airlines. And imports of US agricultural goods risk undercutting local farmers and breaching commitments to the Association of Southeast Asian Nations, as well as other trade agreements. The deal might affect Indonesia's trade relationships in other ways. Indonesia has concluded comprehensive trade agreements with several major partners, including Australia, China, India, Japan, New Zealand, and South Korea. It is close to finalising one with the European Union, and it recently launched negotiations with the United Arab Emirates. If US firms are granted preferential treatment and zero-tariff market access, these partners might question Indonesia's commitment to fair competition -- or demand comparable terms. Beyond trade, the agreement risks eroding Indonesia's carefully maintained strategic neutrality. Indonesia has long sought to balance its relationships with the US and China, but this deal could be seen as a lurch towards the US, exposing the country to escalating pressure to choose a side. As Indonesia becomes increasingly politically entangled with one giant -- with far-reaching economic and strategic consequences -- it is at risk of becoming economically dependent on the other. Over the past decade, Indonesia's trade with China has more than doubled, reflecting deepening economic ties. While Indonesia exports mostly commodities and processed metals to China -- especially nickel, iron and steel, mineral fuels, and vegetable oils -- it imports high-value machinery, electrical equipment, vehicles, and plastics from the country. In the face of challenging trade relations with the world's two mightiest powers, Indonesia's government deserves credit for seeking trade assurances. But the deal that it secured with the US lacks clarity, transparency, mutuality, and strategic vision. As a result, it may turn out to be largely symbolic, bringing only a slight reduction in short-term costs. In the long term, it might prove economically and even geopolitically damaging. Three urgent steps can help prevent this outcome. First, Indonesia's government must demand full clarity from the US on the 19% tariff cap: are all its exports shielded from Trump's sector-specific classifications, or is the real cost of the deal hidden in the fine print? Second, the authorities should publish the full details of their procurement commitments, particularly the purchase of Boeing aircraft and US agricultural and energy products, so that these commitments' financial implications and strategic value can be assessed. Finally, Indonesia must reaffirm a long-term trade strategy anchored in diversification, rules-based agreements, and regional leadership. Above all, it needs a strategy that avoids excessive dependence on any single partner and preserves its autonomy in an increasingly polarised global economy. Only then can Indonesia ensure that a handshake in Washington does not become a handcuff at home. ©2025 Project Syndicate

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store