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The Ripple Effect EP. 8: Thailand Faces 36% U.S. Tariff — Official Notice and Response

The United States has recently revised its trade policy by announcing significant increases in tariff rates on imports from multiple countries, including Thailand. Under these new measures, Thai exports to the United States will be subject to a 36% tariff rate.

Initially, the U.S. President granted a 90-day postponement of the enforcement date, extending the deadline to July 9, 2025. This grace period was intended to provide affected countries with an opportunity to engage in negotiations and submit formal requests for tariff relief.

In response, Thailand dispatched a high-level delegation to the United States and submitted an official proposal for tariff reconsideration in June 2025. Despite these efforts, on July 7, 2025, the U.S. government issued an official letter confirming that Thailand’s tariff rate would remain at 36%. The new enforcement date has been set for August 1, 2025. Notably, while several other countries succeeded in securing reduced tariff rates during the negotiation period, Thailand’s rate remains unchanged from the initial announcement.

Thailand’s Diplomatic Efforts and Regional Comparison in the 2025 Tariff Negotiations

Following the initial announcement, the Thai government promptly established a negotiation team to advocate for Thailand’s position and mitigate potential economic harm. However, despite these efforts, the negotiations did not result in any modification of the imposed rate.

Compared to neighboring Southeast Asian countries, Thailand’s outcome is notably unfavorable. Vietnam successfully negotiated a tariff reduction from 46% to 20%. Cambodia secured partial reductions on selected goods, while Laos and Myanmar obtained cuts from 48% to 44%. Indonesia’s negotiations remain ongoing. Malaysia did not achieve any reductions and continues to face a 25% tariff, which is still lower than Thailand. The Philippines and Singapore benefit from significantly lower rates of 17% and 10%, respectively. Vietnam’s result is widely regarded as the most favorable in the region.

a person s hand holding a pen near a piece of paper

Economic Impact and the Thai Government’s Response

The economic repercussions of this development have raised significant concerns. Analysts project that Thai exporters will be adversely affected—particularly in key sectors such as electronics, automotive components, and food processing. The continued enforcement of the tariff is expected to result in a contraction of GDP growth by approximately 0.5 to 0.7 percentage points in the second half of 2025.

In response, on July 9, 2025, the Thai government announced a comprehensive plan aimed at mitigating the impact of the new tariff. The plan includes measures to strengthen cooperation within ASEAN, diversify trade partnerships, and provide targeted support to businesses affected by the tariff imposition.

Conclusion

Thailand’s inability to secure tariff relief in the 2025 U.S. trade negotiations represents a significant missed opportunity and raises critical questions regarding the effectiveness of the country’s trade diplomacy. While others in the region succeeded in obtaining valuable concessions, Thailand’s unchanged position risks undermining its export competitiveness in the near term.

Although the government has announced a plan emphasizing regional cooperation and trade diversification, the success of these initiatives will largely depend on the rigor and speed of their implementation. The coming months will be pivotal in determining whether Thailand can recover lost ground and effectively recalibrate its trade strategy to navigate the shifting dynamics of the global economic landscape. Business operators should closely monitor the government’s implementation of these measures.

Author: Panisa Suwanmatajarn, Managing Partner.

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The Ripple Effect EP. 7: Thailand Set to Begin Official Tariff Negotiations with the U.S.

Following the formal agreement to commence tariff negotiations with the United States, the Thai government is preparing to submit its official trade proposal to the U.S., with the first round of discussions scheduled to take place at a conference meeting.

Background and Current Status

Thailand recently participated in an online negotiation session with the United States Trade Representative (USTR), during which the U.S. outlined five key priority areas for Thailand’s consideration. These priorities are designed to foster a more balanced and mutually beneficial trade relationship between the two countries.

U.S. Priority Areas

The USTR has identified the following five strategic areas for negotiation:

  1. Tariff measures and import quotas – Addressing existing trade barriers and quota restrictions
  2. Non-tariff trade barriers (NTBs) – Eliminating regulatory and administrative obstacles to trade
  3. Digital trade management – Establishing frameworks for digital commerce and data flows
  4. Enforcement of rules of origin – Strengthening compliance mechanisms for trade agreement provisions
  5. Economic and national security measures – Addressing security-related trade concerns

Timeline and Deliverables

The meeting served to clarify U.S. proposals and establish clear expectations. The USTR has requested that the Thai government submit its initial proposals, addressing the five main areas outlined above, by June 20, 2025, and the Thai government has already submitted so. The negotiations operate under a 90-day framework, with discussions expected to conclude by July 8, 2025. Should additional time be required, the U.S. is anticipated to extend the negotiation period.

Thailand’s Negotiation Strategy

Thailand remains confident that its proposals will yield positive outcomes. The preliminary offers previously presented by Thailand include:

  • Tariff reductions on specific imported goods
  • Procurement commitments for Boeing aircraft and U.S. military equipment
  • Reduction of non-tariff barriers

These proposals are considered substantial enough to encourage serious U.S. consideration and facilitate detailed negotiations. Thailand’s objective is to achieve a final tariff rate not exceeding 10%.

Confidentiality Constraints

Due to the signing of a Non-Disclosure Agreement (NDA), the Thai government is unable to disclose specific details of the ongoing negotiations.

Strategic Implications

The proposed tariff negotiations reflect the broader trade policy objectives of the U.S. government, which seeks to address trade imbalances and promote fairness in global commerce. These negotiations represent a critical juncture for Thailand in maintaining access to one of its most valuable export markets.

The outcome will have direct implications for Thai exporters and the overall bilateral economic relationship. This relationship remains subject to considerable uncertainty, particularly within the context of a challenging global economic environment.

boat in body of water

Recommendations

Stakeholders on both sides are advised to:

  • Closely monitor negotiation developments
  • Prepare comprehensive contingency plans for all possible outcomes
  • Maintain flexibility in strategic planning given the evolving nature of trade discussions

Conclusion

These negotiations constitute a pivotal moment in Thailand-U.S. trade relations. The successful resolution of these discussions will be instrumental in shaping the future economic partnership between the two nations and determining Thailand’s continued access to the U.S. market. Given the complexity of the issues at stake and the broader geopolitical context, careful attention to both the negotiation process and its outcomes will be essential for all stakeholders involved.

Author: Panisa Suwanmatajarn, Managing Partner.

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The Ripple Effect EP.5: Thailand’s Strategic Trade Proposal to Strengthen U.S. Bilateral Relations

As Thailand takes decisive steps to combat origin fraud, protect the integrity of its exports, and rebuild trust with the United States, the Thai government has formally submitted a comprehensive trade proposal to representatives of the United States Trade Representative. Announced by Thailand’s Finance Minister, the proposal aims to strengthen bilateral trade and reduce Thailand’s trade surplus with the U.S. by 50% within five years through a strategic five-point plan.

In a clear signal of strengthening bilateral ties, the U.S. Secretary of the Treasury expressed support for Thailand’s new trade proposal during the recent Saudi Investment Forum. This development reflects broader U.S. willingness to deepen economic cooperation with key Asia-Pacific partners, with Thailand increasingly viewed as a reliable and strategic counterpart in Southeast Asia.

Thailand’s proposal was reportedly well-received and regarded as comparable to recent submissions from other regional economies, including Indonesia and Taiwan. The favorable assessment of Thailand’s initiative underscores the country’s growing importance in regional trade architecture and highlights its proactive approach to navigating shifting global trade dynamics.

Thailand’s approach, focused on joint production models, local investment benefits, and enhanced cooperation at the state level, aligns with current U.S. interests in resilient and diversified supply chains. The overall momentum suggests that Thailand is well-positioned to advance its role as a regional hub and trusted partner in future trade frameworks.

grayscale photo of high rise glass buildings

This development occurs at a time when global economic and geopolitical uncertainties require renewed focus on sustainable and mutually beneficial trade partnerships. Thailand’s engagement strategy appears to be gaining traction, reinforcing its long-term position in the global trade system.

The Thai Finance Minister also expressed confidence that the U.S. would lower its import tariffs on Thai products from 36% to 10%, citing the positive reception of Thailand’s five key trade proposals.

The five main elements of Thailand’s proposal remain consistent with those outlined in our previous report. Thailand continues to actively promote private sector investment in the U.S., focusing on high-potential companies in key industries such as petrochemicals, energy, and automotive components. In recent discussions with representatives of the U.S. Department of Commerce, Thai officials also presented joint manufacturing proposals, including producing solar panels or automotive parts in Thailand for final assembly in the U.S., as a means of adding value and generating employment in both countries.

Conclusion

Thailand’s comprehensive trade proposal represents a proactive approach to reshaping its economic relationship with the U.S. By focusing on mutual growth across the energy, agriculture, technology, and investment sectors, the plan offers a balanced strategy for reducing trade imbalances while strengthening strategic ties. The U.S. Treasury Secretary’s public endorsement lends credibility to Thailand’s initiatives and confirms its growing status as a regional economic leader.

Despite this positive momentum, no formal negotiation date has been scheduled. Thai officials anticipate a response and potential meeting arrangements within the next two weeks. This initiative signals a promising trajectory for long-term cooperation between the U.S. and Thailand amid global uncertainty.

Author: Panisa Suwanmatajarn, Managing Partner.

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Strategic Response to U.S. Tariff Policies: Building a Win-Win Partnership at SelectUSA 2025

On May 11, 2025, at the SelectUSA Investment Summit in Washington, D.C., a high-level Thai delegation, including senior officials from the Ministry of Foreign Affairs, the Board of Investment, the Ministry of Commerce, and the Thai Chamber of Commerce, alongside executives from major Thai corporations such as PTTEP, Charoen Pokphand Foods (CPF), Indorama Ventures, SCG Packaging, Thai Summit, and Banpu, worked to bolster economic ties with the United States amid potential tariff increases under the incoming Trump administration. Thailand’s Ambassador to the U.S. facilitated high-level engagements to advance these goals.

As a leading ASEAN investor in the U.S., Thailand has already contributed over USD 17 billion in direct investments, creating more than 15,000 jobs. To maintain competitiveness, the delegation outlined a proactive strategy, committing an additional USD 2 billion to establish U.S.-based manufacturing hubs that serve global markets, thereby reducing tariff exposure and diversifying supply chains. Thailand is promoting joint manufacturing models, where production starts in Thailand and assembly occurs in the U.S., creating local jobs and aligning with American economic priorities.

The delegation emphasized collaboration in key sectors—clean energy, agriculture, biotechnology, healthcare, and artificial intelligence (AI)—where Thailand’s skilled workforce and abundant resources complement U.S. innovation, fostering resilient and sustainable value chains. To address trade imbalances, Thailand is increasing imports of U.S. goods in agriculture, energy, and digital sectors, aiming for a more equitable economic relationship. Engagements with U.S. federal and state officials, as well as local chambers of commerce, highlighted the importance of subnational partnerships to drive local economic growth and ensure long-term collaboration.

grayscale low angle photo of high rise buildings

Author: Panisa Suwanmatajarn, Managing Partner.

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The Ripple Effect EP.4: Thailand Responds to U.S. Trade Pressure with Tighter Measures on Origin Fraud

Thailand is facing mounting pressure from the United States regarding the implementation of reciprocal tariffs, particularly concerning “origin fraud” – the practice of transshipping goods from other countries through Southeast Asia to circumvent elevated U.S. import duties. In response, the Thai government has implemented more stringent inspection protocols and policy measures aimed at restoring the confidence of key trading partners, particularly the United States, with respect to high-risk commodities including steel, copper wire, and aluminum.

Enhanced International Cooperation

To strengthen cooperation and transparency, the Department of Foreign Trade (“DFT“) under the Ministry of Commerce convened a strategic meeting with U.S. Customs and Border Protection (“CBP“) to clarify tariff classifications of interest to U.S. authorities. During these discussions, Thailand requested that the U.S. provide more specific and detailed tariff codes, particularly for furniture products, to prevent overly broad enforcement that could inadvertently impact legitimate Thai exports.

Expanded Surveillance Measures

As a result of these discussions, the list of products under surveillance for potential origin fraud has been expanded from 49 to 65 product groups, encompassing 224 tariff lines. This comprehensive list remains subject to ongoing revision and will be submitted to the Thai Cabinet for approval before formal issuance by the DFT. Initially, 49 items were under surveillance, including solar panels, truck steel wheels, artificial stone slabs, and steel pipes. The surveillance list has recently been expanded to include additional steel and steel products, aluminum and aluminum products, automobiles and auto parts, solar panels, and medical equipment.

Domestic Regulatory Reforms

At the domestic level, the Ministry of Finance, the Ministry of Commerce, the Ministry of Interior, and other relevant authorities have convened to address violations by foreign businesses and the misuse of Thai Certificates of Origin (“C/Os“). A proposal has been advanced to consolidate full authority for issuing C/Os with the DFT, replacing the current shared responsibility with the Thai Chamber of Commerce, the Board of Trade of Thailand, and the Federation of Thai Industries. This measure aims to strengthen oversight and minimize fraudulent claims.

Phased Implementation Strategy

Thailand has initiated inspections of potentially fraudulent imports under the observation of U.S. officials. These inspections have thus far met expected standards, and the Thai government has outlined a structured three-phase action plan to address the issue comprehensively:

  • Short-term: Immediate inspection of imports; prohibition of goods lacking proper origin details or certification.
  • Medium-term: Implementation of stricter regulations for online platforms, mandatory registration in Thailand, and enforcement of the removal of non-compliant goods.
  • Long-term: Legal reforms to align with international norms and reassessment of restrictions on foreign business involvement.

Investment Policy Adjustments

To further prevent the misuse of Thai territory as a transshipment hub, the Board of Investment (“BOI“) has been tasked with recalibrating its incentive strategies. Future investment promotions will emphasize greater utilization of local content, particularly in the automotive and electric vehicle sectors, and encourage export diversification to reduce dependence on the U.S. market. The BOI continues to support domestic sourcing through its “Thai Content” program and business matching initiatives.

Conclusion

Thailand is implementing decisive measures to combat origin fraud, safeguard the integrity of its exports, and rebuild trust with the United States. Key initiatives include enhanced customs cooperation, centralized control over C/O issuance, more rigorous inspections, and strategic reforms to BOI investment policy. Sustained implementation and enforcement of these measures will be critical as Thailand navigates an increasingly complex global trade landscape.

Author: Panisa Suwanmatajarn, Managing Partner.

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The Ripple Effect EP.3: Strategic Trade Shifts – Thailand’s Solar Sector Under U.S. Scrutiny

The U.S. government’s recent tariff policy implementation represents a profound realignment within Southeast Asia’s solar supply chain. On April 21, 2025, the U.S. Department of Commerce announced final anti-dumping and countervailing duties on solar panels and components from Thailand and several neighboring countries. Subject to a 37% Reciprocal Tariff Tax, Thailand’s solar export industry, which depends heavily on the U.S. market, now confronts intensified trade pressures.

This policy shift has dramatically affected Thailand’s solar industry, currently ranked as the fourth-largest global exporter of solar panels. In 2023, according to Trade Policy and Strategy Office’s database, Thailand exported solar panels valued at over 159 billion baht, with more than 75% destined for the U.S. market. The U.S. policy recalibration has disrupted the industry’s structural foundation, creating substantial challenges for local manufacturers reliant on American buyers.

The policy change was precipitated by concerns from U.S. solar manufacturers who suspect Thailand could function as an indirect manufacturing hub for China, enabling Chinese products to circumvent U.S. tariffs. In recent years, production has increasingly migrated from China to Thailand, Malaysia, Vietnam, and Cambodia, where solar panels are frequently exported at prices below production costs, with many manufacturers benefiting from subsidies provided by China. This shift has significantly undermined U.S. solar manufacturers’ competitive position.

Based on these concerns, the U.S. initiated a comprehensive investigation in 2024, culminating in the imposition of final tariffs substantially higher than initially projected. Some Thai solar companies now face tariffs approaching 1,000%, effectively eliminating their price competitiveness. Meanwhile, countries exempt from these tariffs, including India, Laos, and South Korea, have capitalized on this opportunity to expand their market presence.

aerial photo of cargo ship near intermodal containers

Conclusion

While the current situation presents significant challenges, it simultaneously offers a critical opportunity for Thailand to strengthen its domestic clean energy industry, reduce export dependency, and enhance long-term energy security. With its abundant solar energy potential, Thailand is well-positioned to develop robust technological and manufacturing capabilities. By doing so, the country could establish itself as a regional leader in the energy sector in the coming years.

Although the U.S. anti-dumping and countervailing duty measures pose a substantial threat to Thailand’s solar panel industry, the final outcome remains undetermined. The U.S. International Trade Commission is scheduled to decide on June 2, 2025 whether these tariffs will be permanently implemented while negotiation on those tariff and non-tariff measures will also be under consideration.

Author: Panisa Suwanmatajarn, Managing Partner.

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Public-Private Partnership Act B.E. 2562 (2019): Proposed Amendments

The State Enterprise Policy Office (SEPO), responsible for evaluating the Public-Private Partnership Act, B.E. 2562 (2019), is conducting a public hearing to assess its effectiveness and gather stakeholder feedback for proposed amendments. This aligns with the Law Drafting and Evaluation Act B.E. 2562 (2019), and guidelines set by the Law Development Committee, endorsed by the Cabinet. The goal is to ensure the Act meets its objectives, aligns with international standards, reduces regulatory overlaps, promotes fairness, and boosts Thailand’s competitiveness.

Purpose of the Act:

The Act establishes a clear state policy for infrastructure and public service development through public-private partnerships (PPPs), aiming to:

  • Foster transparent, accountable partnerships.
  • Address delays and obstacles in PPP projects.
  • Leverage private sector expertise and innovation while transferring knowledge to the public sector.
  • Ensure fiscal discipline with streamlined, verifiable processes.

Key Measures of the Act:

The Act outlines measures to achieve its goals:

General Provisions

  • Projects align with national PPP plans, promote fiscal discipline, and prioritize public benefits (Section 6).
  • Covers state investments in infrastructure/services with private participation via concessions or permits (Sections 4, 7).
  • Projects under 5 billion baht follow simplified procedures (Section 9).
  • Mechanisms resolve delays or regulatory issues (Section 11).

PPP Plan Development

  • A national PPP plan aligns with infrastructure and social development master plans (Section 12).

PPP Policy Committee

  • Oversees policy, approves plans, and resolves issues (Section 20).
low angle photography of building

Project Implementation

  • Proposals: Agencies submit detailed feasibility studies (Section 22).
  • Incentives: Include investment benefits and land leases up to 50 years (Section 23).
  • Private Sector Selection: Involves bidding, contract drafting, and Cabinet approval (Sections 36, 38, 41, 42).
  • Oversight: A supervisory committee monitors progress (Sections 43, 44).
  • Contract Amendments: Require justification and approvals (Sections 46–48).
  • Post-Contract: Agencies plan continuity five years before contract expiry (Section 49).

Public Interest Measures

  • Agencies may intervene in projects for public safety or national security, with compensation if private partners are not at fault (Section 50).

PPP Promotion Fund

  • Supports consultancy, training, and administration (Sections 51–59).

Miscellaneous

  • Contracts are submitted to ministries and SEPO, with project data publicly accessible online (Section 60).

Public Benefits:

The Act drives efficient infrastructure and public service development, enhancing quality of life, and national competitiveness, and leveraging private expertise under transparent partnerships.

Proposed Amendments

The amendments aim to significantly enhance the Act’s effectiveness by:

Promoting Innovation: Supporting new partnership models to incorporate advanced technologies and business approaches, fostering adaptability to future needs.

Streamlining Processes: Simplifying procedures to boost efficiency and flexibility, reducing bureaucratic delays.

Prioritizing Strategic Projects: Aligning PPPs with national development goals to maximize public impact.

Optimizing Risk Management: Establishing fairer risk-sharing frameworks between public and private sectors.

Enhancing Transparency: Introducing stricter guidelines for project approval, contract management, and performance monitoring to ensure accountability.

Author: Panisa Suwanmatajarn, Managing Partner.

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The Ripple Effect EP.2: Thailand Caught in the Middle as U.S. Trade Talks Postponed

As the United States (U.S.) imposes a retaliatory import tariff of 37% on Thai goods, Thailand faces significant economic repercussions. In response, the Thai government has developed comprehensive short-term and long-term strategies, focusing on five key negotiation frameworks to present to the U.S.

Thailand-U.S. Economic Negotiations Postponed

The Thai government has been actively preparing for trade talks with the United States Trade Representative (USTR), initially scheduled for April 23, 2025. However, Thailand’s Prime Minister subsequently announced the postponement of these negotiations to an unspecified date, citing the need to monitor the evolving situation and reassess the proposed terms. In these forthcoming discussions, the Deputy Prime Minister and Minister of Finance will represent Thailand, aiming to achieve a mutually beneficial outcome for both nations.

Despite the 90-day delay proposed by the U.S., Thailand continues to face substantial uncertainty. As the U.S. represents Thailand’s largest export market, with annual exports valued at USD 54 billion, the importance of the American market to Thailand’s economy cannot be overstated. This underscores the urgency of successful negotiations aimed at reducing trade barriers.

The Office of SMEs Promotion (OSMEP) has warned that approximately 3,700 Thai small and medium enterprises (SMEs), representing an export value of around USD 7.634 billion annually, will likely be impacted by these trade tariffs. In response, the Export-Import Bank of Thailand has implemented five key support measures:

  1. Financial advisory services
  2. Debt restructuring and repayment extensions
  3. Liquidity support
  4. Interest rate reductions
  5. Strategic guidance for market diversification

Additionally, the bank provides mechanisms for non-payment risk protection and promotes Thai investment opportunities in the U.S.

close up of human hand

Economic Pressures: Thailand’s Balancing Action

China ranked as Thailand’s second-largest foreign investor last year with investments exceeding THB 170 billion, according to the Board of Investment (BOI) database. This economic reality places Thailand in a precarious position. While the U.S. remains a crucial export destination, China’s significant role as a major investor, particularly in the manufacturing sector, creates complex diplomatic challenges. Ongoing U.S. tariffs continue to burden Thai exports, while China’s assertive approach to protecting its interests further complicates Thailand’s strategic position.

Although, Thailand has maintained neutrality in the ongoing trade conflict, it continues to experience economic fallout from this global dispute. Any concessions made during negotiations with Washington that might undermine Beijing’s interests could trigger retaliatory actions, as China has previously indicated.

Looking Forward

Thailand now navigates an increasingly complex economic landscape amid continuing trade tensions between global powers. The postponement of U.S. trade negotiations, with no new date established, allows Thai officials to reassess their strategy while monitoring international developments.

The economic impact on thousands of Thai SMEs remains a significant concern for policymakers. Despite Thailand’s carefully maintained neutrality, the country remains vulnerable to broader consequences of this trade dispute. Moving forward, Thailand’s ability to balance these competing interests while protecting its economic sovereignty will be crucial to its long-term prosperity and regional standing.

Author: Panisa Suwanmatajarn, Managing Partner.

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The Ripple Effect: How Trump’s ‘America First’ Tariffs Impact Thai Trade

Under the “America First” and “Reciprocal Trade and Tariffs” framework announced on April 3, 2025, the United States has implemented a minimum import tariff of 10% on goods originating from all countries. Additionally, an escalating tariff system will be applied to nations that maintain a bilateral trade surplus with the United States and those are identified as engaging in unfair trade practices. These practices include, but are not limited to, import duties, non-tariff barriers, and various regulatory fees. The tariff rate imposed on such countries will be calculated as 50% of the effective tariff rate that the U.S. goods face when entering their markets.

Thailand is poised to experience significant economic consequences as the United States imposes a retaliatory import tariff of 37% on Thai goods, effective April 9, 2025. However, after the measure was in force for only a few hours, the president ordered a temporary halt and postponed the enforcement for a 90-day period. This substantial tariff, one of the highest in the region, is a direct result of Thailand’s considerable trade surplus with the U.S., which exceeds $40 billion out of more than $60 billion in exports, providing Thailand with a 70% trade advantage. Consequently, major Thai exports to the U.S., including mobile phones, electronics, vehicle tires, and semiconductors, are expected to encounter substantial challenges.

The measures have precipitated financial market instability, resulting in a decline in the valuations of risk assets across equity and currency markets in the affected emerging economies. Conversely, safe-haven assets such as gold have experienced increased demand and price appreciation. The Thai Baht has depreciated by 0.28%, while the yield on Thai government bonds has decreased by approximately 5 basis points, currently standing at 1.89% for the 10-year maturity. Furthermore, Thailand’s sovereign credit risk, as reflected by Credit Default Swaps, has exhibited a slight increase. Notably, the overall movement in Thai asset prices corresponds with broader market trends observed throughout the region.

In response, the Thai government has developed comprehensive short-term and long-term strategies, with a primary emphasis on proposing negotiation frameworks to the United States. These 5 frameworks aim to address trade imbalances through:

view of shipping containers
  1. Increase Imports of U.S. Goods: Focus on increasing the importation of essential goods from the U.S. that meet domestic needs in Thailand, including agricultural products such as corn, soybeans, and pork offal, as well as energy products like natural gas.
  2. Reduce or Eliminate Tariffs: Propose the reduction or elimination of import tariffs on over 100 goods from the U.S. In addition, review and lower tariffs on goods imported from the U.S. that are subject to high tariff rates, while also increasing import quotas where applicable.
  3. Eliminate Non-Tariff Barriers: Remove non-tariff barriers to facilitate smoother and more efficient trade between Thailand and the U.S., ensuring a more open trade environment.
  4. Address Misrepresentation of Thai-Origin Goods: Take measures to address issues regarding the misrepresentation of Thai-origin goods being exported to the U.S., ensuring compliance with U.S. origin labeling and trade regulations.
  5. Explore U.S. Investment Opportunities: Consider exploring investment opportunities in the U.S. market, particularly in sectors such as natural gas transport infrastructure in Alaska and agricultural product processing. This would promote bilateral investment and foster economic collaboration.

The overarching objective of these measures is to help narrow the bilateral trade surplus without curtailing Thailand’s exports to the United State.

The government’s primary goal is to strengthen Thailand’s capacity to import essential goods that support its production and export sectors, with relevant agencies assigned to oversee detailed implementation. Furthermore, to address non-tariff barriers, the Thai government will undertake initiatives to streamline regulations and reduce import duties on products identified by the United States as trade impediments.

Conclusion

The significant retaliatory tariff measures implemented by the United States under the “America First” and “Reciprocal Trade and Tariffs” policies, effective as of April 9, 2025 (Although, the president has currently ordered a temporary halt, the enforcement of the measures has been postponed for a 90-day period), are having a pronounced impact on Thailand. The introduction of a substantial 37 percent import tariff—driven by the U.S. response to Thailand’s trade surplus—presents major pricing challenges for a wide range of Thai exports to the U.S. market and contributes to heightened financial market volatility. In response, the Thai government has formulated a comprehensive strategy comprising both short-term and long-term countermeasures. These include active negotiations and structural adjustments to its trade framework, aimed at mitigating adverse effects and preserving economic stability. Continued monitoring of developments and policy updates is recommended to remain informed on Thailand’s evolving approach and the broader international trade landscape.

Author: Panisa Suwanmatajarn, Managing Partner.

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Investment Trends in Thailand in 2025: The Increase in Foreign Investment Reflecting Thailand’s Potential to Attract Global Investors

In the face of a rapidly evolving global economy, Thailand has demonstrated a clear commitment to becoming a leading investment hub in the region. With its robust strategic advantages, ongoing infrastructure advancements and attractive investment support initiatives, the Thai government is diligently working to position the country as a premier destination for global investors.

The Director-General of the Department of Business Development, Ministry of Commerce, recently announced a notable surge in foreign investment, with 181 permits issued under the Foreign Business Act B.E. 2542 (1999) in the first two months of 2025. This marks a significant 68% increase compared to the same period last year, reflecting growing investor confidence in Thailand’s economic prospects and its continued recovery.

The investment landscape comprises 41 applications for Foreign Business Licenses (FBL) and 140 applications for Foreign Business Certificates (FBC), as well as those under treaties or international agreements. The most prominent foreign investors in Thailand come from leading economies such as Japan, China, Singapore, the United States and Hong Kong, engaging in the following business activities:

  1. Japan: With the highest investment rate at 21% and a total investment of 13,676 million baht, Japanese companies primarily focus on raw material sourcing, management solutions and Original Equipment Manufacturing (OEM).
  2. China: Representing 13% of investments with a total of 5,113 million baht, Chinese companies concentrate on raw material procurement, customs clearance within free trade zones, factory rentals and OEM.
  3. Singapore: Contributing 13% of investments with a total of 4,490 million baht, Singaporean enterprises invest primarily in modern distribution center services, tire research and development, data center operations and OEM.
  4. United States: Accounting for 11% of investments with a total of 1,372 million baht, American investors are active in retail, data support services for securities trading on the Stock Exchange of Thailand (SET) and OEM.
  5. Hong Kong: Comprising 9% of investments with a total of 1,587 million baht, Hong Kong businesses focus on engineering and technical services, modern distribution center operations, electric vehicle (EV) charging station infrastructure and OEM.
statues on buddhist temple

The Eastern Economic Corridor (EEC) has emerged as a key magnet for foreign capital, attracting 57 foreign investment projects, marking a remarkable 63% increase and representing 31% of total foreign investments. The total investment value within the EEC reached an impressive 17,546 million baht, accounting for 50% of all foreign investments during this period.

The EEC attracts investment across diverse sectors including retail, plastic mold manufacturing, refrigeration components, parts for tire manufacturing machinery, factory rental services, customs clearance services within free trade zones and OEM of various products such as automotive parts, metal stampings and molds. Key investors in the EEC include Japan, China, Singapore and other countries.

Thailand’s robust investment appeal is driven by a competitive environment supported by the Thailand Board of Investment (BOI). The BOI offers a comprehensive range of incentives including:

  • Corporate Income Tax (CIT) exemptions (up to 13+ years)
  • Import duty exemptions on key machinery and materials
  • Deductions for operational and R&D costs

Non-tax benefits include conditional foreign land ownership, streamlined visa and work permit processes and convenient one-stop services. These incentives are strategically designed to attract investments in high-tech, value-added and other key industries. Additionally, projects located in designated zones such as the EEC are eligible for enhanced benefits.

In conclusion, the significant rise in foreign investment in early 2025, particularly within the dynamic EEC, highlights Thailand’s growing prominence as a leading investment destination in Asia. Fueled by investor confidence, strategic advantages and proactive government policies, Thailand is reinforcing its position as a key hub for international capital and a vital player in the regional economic landscape.

Author: Panisa Suwanmatajarn, Managing Partner.

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