Thailand Faces Economic Challenges from U.S. Tariffs

Author: Vietnam News Agency

Date: Wed, April 9, 2025 | 10:05 PM GMT+7

The recent announcement from the U.S. administration regarding the imposition of a significant 36% reciprocal tariff on Thai exports has sent shockwaves through Thailand’s economy. The Federation of Thai Industries (FTI) has estimated that this move could lead to an alarming revenue loss of THB 900 billion (approximately $25.8 billion). This new tariff policy is poised to impact a wide range of industries and has raised concerns over the sustainability of Thailand’s export-driven economy.

The Impact on Various Industries

Automotive Industry:
Among the sectors likely to be most affected is the automotive industry. Thailand’s automotive sector is already grappling with a 25% tariff, introduced in March, and the looming 36% reciprocal tariff could compel car manufacturers to reconsider their operational bases. Kriangkrai Thiennukul, the president of FTI, expressed particular concern for motorcycle producers, who may need to relocate production to more tariff-friendly countries.

Food Sector:
The food industry, especially processed food and seafood, is another major player set for direct impact. These products, which have enjoyed exemption from current tariffs, will soon be subject to the hefty 36% tariff. The increase in costs could significantly reduce Thailand’s competitiveness in U.S. markets, further straining the industry.

Chemicals and Textiles:
The chemical exports sector, already valued at around $2 billion annually, is bracing for reduced sales due to the elevated tariffs. Similarly, U.S. buyers may seek alternatives to Thai textiles, which could create a potential crisis in this vital export segment. Increased costs incurred from the tariffs are set to make Thai textiles less appealing, complicating matters for local manufacturers.

Proposals for Mitigation

In light of these challenges, the FTI has urged the Thai government to take immediate action. They propose accelerating negotiations with the U.S. to advocate for reduced import taxes on U.S. products such as maize, tuna fish, and meat. Additionally, a push for issuing certificates of origin for Thai-manufactured products, such as hard disks and solar cells, has been suggested as a viable route to mitigate the economic fallout.

Addressing Intellectual Property Concerns

Kriangkrai has also emphasized the importance of tackling issues surrounding intellectual property infringement and market dumping of cheaper products into Thailand. These challenges not only threaten the stability of Thai industries but also undermine the efforts to maintain fair trade practices in the region.

Conclusion Without a Conclusive Ending

As Thailand navigates this turbulent economic landscape, the implications of the U.S. tariffs are becoming increasingly clear. Industries are bracing for impacts that could alter their operational landscapes profoundly. Each sector faces unique challenges, and as Thailand responds, the outcomes will be closely monitored by both domestic stakeholders and international observers. The overarching hope is that timely government intervention can alleviate some of the impending economic burdens and foster a more resilient export market in the face of global trade uncertainties.