Thailand submits new trade proposal offering zero tariffs on many US goods
BANGKOK (Reuters): Thailand has submitted a new trade proposal to the United States, offering to cut levies to zero on many US imports in a bid to avoid steep tariff hikes on its own products, the finance minister said on Monday.
Washington has threatened to impose a 36% levy on Thai imports if no reduction is negotiated before July 9, when a 90-day pause capping tariffs at a baseline of 10% for most nations expires.
The United States accounted for 18.3% of Thailand's shipments last year, amounting to $54.96 billion in value, making it Thailand's biggest export market. Washington says its deficit with Thailand stood at $45.6 billion.
"We heard their feedback and what they were especially interested in, and we adjusted it (the trade proposal)," minister Pichai Chunhavajira told reporters, who returned from Washington last week following talks.
The U.S. Trade Representative's office praised Thailand's efforts but suggested minor adjustments, Pichai said.
He said the improved proposal includes zero tariffs on many U.S. imports and other measures that aim to bring trade with the United States into balance in less than 10 years, sooner than earlier proposed. It also includes commitments to increase imports of American goods to boost bilateral trade.
"It's not just about reducing tariffs but also about opening up trade further," he said.
"Of course, we are not offering a 0% tariff across the board, but we are providing zero tariffs on a substantial number of items," Pichai said.
"In my view, the conditions we have proposed are very favourable and should satisfy them," he added.
Trade talks are expected to continue after the tariff pause ends, as negotiating trade terms requires consultations among multiple stakeholders, Pichai said.
Thailand's top three exports to the United States last year were computers, teleprinters and telephone sets, and rubber products. Its top three imports from the U.S. were crude oil, machinery and parts, and chemicals.
Pichai said earlier that Thailand would import more U.S. natural gas and cut tariffs on imports of corn from the United States. U.S. corn is subject to a 73% import tax, according to the Thai Feed Mill Association.
The Thai state-owned energy giant, PTT Group in June signed an agreement to procure 2 million metric tons of liquefied natural gas per year from Glenfarne's Alaska LNG project over a 20-year term. The $44 billion project has been championed by U.S. President Donald Trump.
Pichai earlier said Southeast Asia's second-largest economy could expand by just over 1% this year due to the impact of U.S. tariffs.
Thailand's economy has struggled with weak consumption, soaring household debt, slowing tourism, trade uncertainty and potentially steep U.S. tariffs.
Last month, the central bank forecast economic growth of 2.3% this year, after last year's growth of 2.5% lagged peers in the region.
(Reporting by Orathai Sriring; Kitiphong Thaichareon and Thanadech Staporncharnchai, Writing by Chayut Setboonsarng, Editing by David Stanway, Martin Petty) - Reuters
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