Legal Update: Thailand Named in the White House Transshipment Report — Legal Exposure and the Government’s Response

on
facade of ananta samakhom throne hall in dusit palace in bangkok thailand

Legal Update: Thailand Named in the White House Transshipment Report — Legal Exposure and the Government’s Response

Introduction

On 13 August 2026, the White House Office of Trade and Manufacturing Policy published a report entitled The Great Transshipment Scam (the “Report”). The Report identifies more than 40 jurisdictions said to present elevated risk of illegal transshipment of Chinese-origin goods into the United States and places Thailand in the second of three risk tiers.

The Thai Government responded within days, on 15 August 2026, confirmed that technical tariff negotiations with the United States would proceed at the end of August, and on 17 August 2026, the Department of Foreign Trade (“DFT”), Ministry of Commerce (“MOC”), set out the measures Thailand has taken on origin verification and its position on the underlying analysis.

The Report is not a legal instrument: it imposes no duty and creates no liability. Nonetheless, it consolidates a documented U.S. Government position that will inform enforcement targeting, trade remedy proceedings, and the negotiation of an Agreement on Reciprocal Trade (“ART”).

Thailand’s Classification under the Report

The Report groups the identified jurisdictions into three tiers. The first comprises diversified economies with large volumes of China-linked goods and comparatively strong customs systems, including Canada, the European Union, India, Israel, Japan, Mexico, South Korea, and Taiwan. The third comprises smaller economies said to offer specific weak-link advantages, such as low-cost labor, permissive free zones, or limited customs capacity.

Thailand is placed in the second tier, described as economies combining significant transshipment volumes with deep integration into China-linked supply chains, alongside Brazil, Indonesia, Malaysia, Turkey, and Vietnam. The Report characterizes Thailand, Vietnam, Malaysia, and Indonesia as major platforms for electronics, machinery, plastics, footwear, apparel, and components incorporating Chinese-origin inputs.

Thailand is named specifically in two contexts, and the two carry different legal weight.

The first is the Report’s “ugly sister city” analysis, which pairs foreign industrial corridors with U.S. regions producing the same goods, on the premise that work gained in one is work lost in the other. Thailand’s entry pairs the Ayutthaya–Samut Prakan corridor — linked to thermostats under HS 903210 — with the Minneapolis–St. Paul instruments sector. This is an inference drawn from trade statistics rather than a finding against any specific company, and the Report itself describes the pairings as illustrative. It nonetheless signals to U.S. Customs and Border Protection (“CBP”) which product code and geographic area warrant closer scrutiny.

The second reference concerns a decided case. The Report cites circumvention findings on solar cells and modules, in which the U.S. Department of Commerce determined that duties on Chinese goods were being evaded through final processing in Cambodia, Malaysia, Thailand, and Vietnam. Thailand therefore already has an enforcement record on this issue.

Thailand’s Response

According to MOC figures cited on 15 August 2026, approximately 72 percent of Thai product lines under Section 301 and Section 232 measures are already exempt, leaving roughly 28 percent still subject to the additional tariff. The exemptions span eight industry groups:

  • Electronic equipment and electrical machinery;
  • Machinery and components;
  • Iron and steel;
  • Articles of iron or steel;
  • Plastics and plastic products;
  • Vehicles and components;
  • Copper and copper products; and
  • Measuring, medical, and optical instruments.

Four of these groups fall under Section 232. As explained below, their inclusion reflects a distinction: goods in those categories are excluded from Section 301 to prevent double charging, rather than relieved of duty altogether.

Thailand is responding on three fronts.

Origin verification: The DFT has reported that the watch list operated jointly with CBP has been expanded from 49 items covering 194 tariff lines to 67 items covering 274 tariff lines, effective 1 June 2026. The DFT is developing an AI-assisted origin risk assessment system, has trained more than 2,000 operators on rules of origin and local content requirements, and has increased factory inspections, retrospective origin audits, and data linkage with the Customs Department, the Department of Industrial Works, and provincial commercial offices. The DFT and the Customs Department were scheduled to meet the Office of the United States Trade Representative (“USTR”) between 28 and 31 August 2026.

Negotiation: The Government confirmed on 15 August 2026 that technical tariff discussions would take place at the end of August, led by the Deputy Prime Minister and Minister of Commerce. It cited Thai private-sector investment in the United States of close to USD 20 billion as evidence of mutual economic interest, and denied reports that the negotiations were linked to any security or military arrangement.

The trade surplus: Thailand exports more to the United States than it imports, but at least 30 percent of those exports are produced by U.S. companies operating manufacturing bases in Thailand. On Thailand’s analysis, the bilateral surplus therefore measures the depth of a shared supply chain rather than a one-sided advantage, and cannot be read from the headline figure alone. It must instead be assessed together with investment flows, the location of production, and the broader scope of economic activity between the two countries.

Key Takeaways

  • The Report places Thailand in Tier 2 of a three-tier transshipment risk classification, alongside Brazil, Indonesia, Malaysia, Turkey, and Vietnam.
  • The Report is analytical rather than legal. It imposes no measure and expressly acknowledges that the trade patterns it identifies do not, by themselves, establish illegal transshipment.
  • Thailand has expanded its CBP watch list to 67 items and 274 tariff lines effective 1 June 2026, is deploying AI-assisted origin risk assessment, and met with the USTR between 28 and 31 August 2026.
  • Approximately 72 percent of Thai product lines under Section 301 and Section 232 are already exempt, with roughly 28 percent remaining exposed.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

Posted in

Tagged as