Thailand Grapples with US Tariffs, Seeks Relief Through Trade Talks

Thailand’s parliament convened an urgent debate on Wednesday to address the economic fallout of a new 36% US tariff imposed on the country’s exports, Bloomberg reports.

Lawmakers voiced concerns about the long-term impact on Thailand’s trade-reliant economy.

The government agreed to prioritize the parliamentary discussion on the tariffs, which are seen as the most pressing issue facing the nation, according to Wisut Chainarun, chief whip of the ruling Pheu Thai party. Discussions on other bills, including a measure to legalize casinos in entertainment complexes, were postponed.

Prime Minister Paetongtarn Shinawatra’s administration is actively seeking negotiations with the US to mitigate the impact and explore ways to reduce Thailand’s nearly $46 billion trade surplus with Washington. Thailand, among the nations hardest hit by the tariffs that took effect on Wednesday, has offered to increase imports of energy, agricultural products, and aircraft, as well as lower import taxes.

The US was Thailand’s largest export market last year, with electronics, machinery, and agricultural products topping the list. Thailand now also faces the potential for increased competition from cheap products originating from China and other countries subject to even higher tariffs.

A survey of Thai CEOs released Wednesday revealed that almost 71% are worried about a flood of cheap Chinese goods into Thai markets, which could lead to decreased capacity utilization and factory closures.

The Thai government has designated Deputy Prime Minister and Finance Minister Pichai Chunhavajira to spearhead tariff negotiations with the Trump administration. A working group of government officials has been established to develop strategies to minimize the impact on the economy and trade.

Sirikanya Tansakun, a lawmaker and deputy leader of the opposition People’s Party, criticized the Paetongtarn government’s response as insufficient, calling its offer to the US not “phenomenal.” She also suggested that recent actions, such as Thailand’s repatriation of 40 Uyghur refugees to China and a court’s denial of bail to a US academic accused of insulting the monarchy, would hinder tariff negotiations.

Sirikanya argued that a 3 billion baht ($86 million) relief package for affected industries was inadequate compared to measures announced by other countries. She proposed raising the legal public debt ceiling from 70%, provided the government has concrete plans to sustain growth, boost investment, and protect impacted industries, noting that the tariffs could potentially reduce Thai GDP by one percentage point.