Prime Minister Paetongtarn Shinawatra announced on Thursday that Thailand will negotiate with the United States regarding tariffs.
This statement came just hours after US President Donald Trump declared a 36% tariff on Thai goods, as well as extensive tariffs on imports from various countries into the US.
Prime Minister Paetongtarn assured the press, “We won’t let it affect our GDP targets. We have a strong plan.”
“We have prepared several steps, including sending our permanent secretary to talk with them… I think we can still negotiate,” she added.
Deputy Finance Minister Julapun Amornvivat conveyed that the government had anticipated the imposition of tariffs, although the 36% rate was unexpected.
“We need to negotiate with understanding, not aggressive talk, but we must discuss which products they feel are unfairly taxed and see whether adjustments are possible,” he explained during an online video interview.
Last year, Thailand’s trade surplus with the US amounted to $45 billion, as reported by the Office of the US Trade Representative.
In anticipation of the tariff announcement, Thailand had adopted a wait-and-see approach and committed to increasing imports of energy and food products to reduce the trade surplus.
The US remains Thailand’s most significant export destination, with top exports including electronics, machinery, and agricultural products.
Thai Chamber of Commerce Chairman Poj Aramwattananont noted that the 36% tariff was beyond what Thai businesses had anticipated and called for prompt negotiation efforts.
The business community had not expected the US to impose tariffs exceeding 25% on Thai products, he mentioned.
“Don’t panic, as other countries are also facing higher tariffs,” Mr. Poj said. “The US will also feel some impact from this, as they still can’t produce enough to replace the imports quickly.”
According to InnovestX Securities, the reciprocal tariffs might reduce Thai GDP by up to 1.2 percentage points from the projected 2.5%, with a potential interest rate reduction by the Bank of Thailand providing minimal economic support.
Thailand appears on the “Dirty 15” list of nations likely impacted by Trump’s tariffs. Typically, the US imposes a 2% tariff on Thai imports, while Thailand applies an average of 8% on American goods.
Following the tariff hikes announced by President Trump, Southeast Asian currencies and stock markets experienced a downturn on Thursday.
The Thai baht dropped by as much as 0.8% against the US dollar, with the Malaysian ringgit and South Korean won also showing declines.
Singapore’s primary stock index initially fell by up to 1.3% before recovering some of its losses, while Malaysia’s index declined by 0.7%. This year, Southeast Asian stocks have been among the poorest performers globally.
ING Bank analysts Padhraic Garvey and Francesco Pesole noted in a client briefing, “The worst-hit region by this tariff announcement is undoubtedly Asian emerging markets.”
They predicted widespread risk-off sentiment in global markets, accompanied by lower market rates.
The recent tariff measures announced by Trump have particularly impacted Southeast Asia.
The US will raise tariffs on Vietnam’s exports by 46%, Thailand’s by 36%, and Indonesia’s by 32%. China, the region’s largest trading partner, now faces a cumulative 54% tariff.
Investors are now anticipating potential retaliatory measures from affected countries, which could intensify global trade tensions.
While nations like Australia have definitively stated they will not retaliate, the response from economies such as China remains highly anticipated.
