Thailand, in its latest proposal to avert steep US tariffs, is aiming to boost bilateral trade volumes with the US and reduce its $46 billion trade surplus by 70% within five years, reaching balance in seven to eight years, Finance Minister Pichai Chunhavajira told Bloomberg News on Sunday.
Washington has threatened to impose a 36% levy on imports from Thailand if a reduction cannot be negotiated before July 9, when a 90-day pause capping tariffs at a baseline of 10% for most nations expires.
Thailand is pushing for a best-case rate of 10%, Pichai said Bloomberg in an interview, adding that even a range of between 10% and 20% would be acceptable.
Pichai expects to submit the revised offer before July 9, the report said.
If approved, Thailand would be able to immediately waive import duties or non-tariff barriers for most goods, while gradually removing restrictions on a smaller number of items, according to Pichai.
The move follows Pichai’s meeting with Jamieson Greer, a US trade representative, and Michael Faulkender, US Assistant Secretary of the Treasury, last Thursday during the first ministerial-level talks on tariff issues.
Pichai said the increased access to US products is unlikely to impact Thai farmers or local producers, as the goods in question are items Thailand does not produce in sufficient quantity to meet domestic demand.
“What we offered them is a mutually beneficial proposal,” he said. “The US can trade more with us, and we will have the opportunity to streamline our processes and reduce red tape.”
Thailand is among several countries racing to conclude a trade agreement with the United States in a bid to avoid steep tariff hikes.
If Thailand fails to lower trade barriers with its largest export market, the result could be a sharp decline in export volumes, potentially shaving up to 1% off national economic growth, Pichai warned.
Neighbouring Vietnam finalised its own deal last week after former US President Donald Trump announced a 20% import tariff on general goods and a 40% tariff on foreign products routed through Vietnam.
Thailand is now pushing for a 10% tariff rate from the US—described by Pichai as the most favourable scenario. However, he noted that even a 10–20% rate would be manageable. “The worst-case scenario,” he said, “would be ending up with a worse deal than our regional neighbours.”
To strengthen its position, Thailand has intensified plans to purchase more American products, particularly liquefied natural gas (LNG) and Boeing aircraft, as part of efforts to narrow the trade imbalance, Pichai said.
Thai petrochemical firms including SCG Chemicals Plc and PTT Global Chemical Plc have committed to importing more ethanol from the US. State-owned energy giant PTT Plc also announced it could purchase up to 2 million tonnes of LNG annually from an Alaskan gas project over a 20-year period. In addition, state-run Thai Airways said it may buy as many as 80 Boeing aircraft over the next few years.
Lowering US tariffs is seen as critical to shielding Thailand’s trade-dependent economy, which is already under pressure from Southeast Asia’s highest household debt and sluggish domestic consumption.
A favourable trade deal could also help restore investor confidence following the recent political turbulence triggered by the suspension of Prime Minister Paetongtarn Shinawatra over allegations of ethical misconduct in handling a border dispute with Cambodia.
Thai exports rose by roughly 15% in the first five months of the year, largely driven by advance orders placed before a temporary 90-day tariff reprieve came to an end.
Source: The Nation
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<p>Time: 2024 By: Ministry of Industry and Trade</p>
