Latest news with #Somjai
Bangkok Post
21-07-2025
- Business
- Bangkok Post
Thailand 'can't match' Vietnam's US tariff proposals
Thailand cannot offer the same kind of trade proposals to the United States as Vietnam did, warns Somjai Phagaphasvivat, an expert in international economics, who added that Vietnam was able to remove tariffs on all US imports because it has free trade agreements (FTAs) with 27 countries, which have already reduced most of Vietnam's import tariffs to zero. In contrast, Thailand is unlikely to do the same, because it has FTAs with fewer countries than Vietnam does, he said. "Nevertheless, one thing we must consider is that, at some point, we may have to do what Vietnam did in the future. We will need to enhance our competitiveness, and when the time comes and we have more FTAs with other countries, we'll be able to open up fully," said Mr Somjai. According to Mr Somjai, in the current negotiations with the US, the goal is to lower Thailand's import tariffs on US goods to 0% to as great a degree as possible. However, in his view, the proposed tariff reductions will likely fall into three groups: goods taxed at the Most Favored Nation (MFN) rate, goods for which tariffs will be reduced below the MFN rate but not yet to 0%, and goods for which tariffs will be reduced to 0%. The products for which import tariffs should be reduced to 0% ought to be those that Thailand does not produce domestically or can only produce in limited quantities, he said. Mr Somjai added that US President Donald Trump's tariff policy was not just about reducing the US trade deficit with other countries, but also about linking security issues with trade policy, possibly interfering in domestic politics in other countries to serve as a mechanism for expanding US influence in the region, which would have an impact on China. Nevertheless, Mr Somjai, who has closely followed geopolitical issues in the region for a considerable time, said that by linking security concerns with trade issues, the US probably knows deep down that Thailand cannot comply, but it does so to increase bargaining power -- similar to how the US imposed a 50% import tariff on Brazil to pressure the Brazilian president into releasing a former president who was allied with the US and under prosecution -- an act viewed as interference in another country's domestic politics. Recently, there was an unconfirmed report that the US requested to use a naval base in Phang Nga province as a strategic base to control the Strait of Malacca, a key route for oil transportation, which would directly impact China. Meanwhile, Deputy Prime Minister and Minister of Finance Pichai Chunhavajira said on July 14 that he "would not bring trouble into the house" and admitted that negotiations with the US on tariff issues also involve geopolitical dimensions. Mr Somjai noted that some product categories, if import tariffs were reduced to 0%, could affect domestic industries. It may be necessary to negotiate terms, such as allowing such imports at a 0% rate but within a specified quota, and also potentially relaxing product standards -- depending on how much flexibility Thailand is willing to give to the US. Additionally, on non-tax issues, he said the US has pressured several countries to open up their government procurement processes, allowing US companies to participate more extensively in bidding for public sector projects.
Bangkok Post
20-07-2025
- Business
- Bangkok Post
Nation put off taking Vietnam's approach
Thailand cannot offer the same kind of trade proposals to the United States as Vietnam did, warns Somjai Phagaphasvivat, an expert in international economics, who added that Vietnam was able to remove tariffs on all US imports because it has free trade agreements (FTAs) with 27 countries, which have already reduced most of Vietnam's import tariffs to zero. In contrast, Thailand is unlikely to do the same, because it has FTAs with fewer countries than Vietnam does, he said. "Nevertheless, one thing we must consider is that, at some point, we may have to do what Vietnam did in the future. We will need to enhance our competitiveness, and when the time comes and we have more FTAs with other countries, we'll be able to open up fully," said Mr Somjai. According to Mr Somjai, in the current negotiations with the US, the goal is to lower Thailand's import tariffs on US goods to 0% to as great a degree as possible. However, in his view, the proposed tariff reductions will likely fall into three groups: goods taxed at the Most Favored Nation (MFN) rate, goods for which tariffs will be reduced below the MFN rate but not yet to 0%, and goods for which tariffs will be reduced to 0%. The products for which import tariffs should be reduced to 0% ought to be those that Thailand does not produce domestically or can only produce in limited quantities, he said. Mr Somjai added that US President Donald Trump's tariff policy was not just about reducing the US trade deficit with other countries, but also about linking security issues with trade policy, possibly interfering in domestic politics in other countries to serve as a mechanism for expanding US influence in the region, which would have an impact on China. Nevertheless, Mr Somjai, who has closely followed geopolitical issues in the region for a considerable time, said that by linking security concerns with trade issues, the US probably knows deep down that Thailand cannot comply, but it does so to increase bargaining power -- similar to how the US imposed a 50% import tariff on Brazil to pressure the Brazilian president into releasing a former president who was allied with the US and under prosecution -- an act viewed as interference in another country's domestic politics. Recently, there was an unconfirmed report that the US requested to use a naval base in Phang Nga province as a strategic base to control the Strait of Malacca, a key route for oil transportation, which would directly impact China. Meanwhile, Deputy Prime Minister and Minister of Finance Pichai Chunhavajira said on July 14 that he "would not bring trouble into the house" and admitted that negotiations with the US on tariff issues also involve geopolitical dimensions. Mr Somjai noted that some product categories, if import tariffs were reduced to 0%, could affect domestic industries. It may be necessary to negotiate terms, such as allowing such imports at a 0% rate but within a specified quota, and also potentially relaxing product standards -- depending on how much flexibility Thailand is willing to give to the US. Additionally, on non-tax issues, he said the US has pressured several countries to open up their government procurement processes, allowing US companies to participate more extensively in bidding for public sector projects.
