Thai Government Policy Response to Recent U.S. Tariff Measures

Following the United States government’s official announcement imposing a 19% import tariff on Thai goods effective August 1, 2025, the Thai government has developed a comprehensive policy framework to mitigate economic impacts. This multi-pronged approach encompasses financial support mechanisms, fiscal policy adjustments, and targeted business assistance programs designed to maintain Thai export competitiveness in the U.S. market while ensuring economic stability throughout this transition period.

U.S. Trade Policy Changes

General Tariff Implementation

The United States has implemented a 19% import tariff on Thai goods, effective August 1, 2025, representing a significant shift in bilateral trade relations.

Copper Products Tariff Structure

Concurrently, the U.S. has imposed a 50% import tariff on copper products from all countries, effective August 1, 2025. This comprehensive measure applies to:

• Semi-finished copper products
• Goods with high copper content
• Copper pipes, wires, rods, and cables
• Copper connectors and electronic components

The tariff excludes copper scrap, imported raw copper materials, and refined copper—essential components of the global supply chain. These exemptions have precipitated a significant decline in copper prices, resulting in substantial losses for traders who had accumulated inventory in anticipation of increased demand.

Government Response Measures

Immediate Business Support Initiatives

Tax Relief Programs

• Strategic tax incentives including deductions and credits
• Reduced corporate income tax rates
• Targeted relief measures to facilitate business adaptation during the tariff transition

Soft Loan Program

• Allocation of a minimum of 200 billion baht through state financial institutions
• Distribution via commercial banking networks
• Designed to maintain business liquidity and operational continuity

Government Subsidies

• Competitiveness enhancement funding administered by the Board of Investment (BOI)
• Targeted support for strategic industries
• Focus on maintaining competitive positioning in global markets

Cabinet-Approved Economic Stimulus

The Cabinet has authorized two major stimulus initiatives, totaling 18.5 billion baht, specifically designed to:

• Strengthen national economic competitiveness
• Provide enhanced student loan support programs

Institutional Support Framework

Export Support Infrastructure

On August 7, 2025, the Ministry of Commerce established a One-Stop Service Center at the Export Center, providing:

• Comprehensive consultation services
• Advisory support for affected businesses
• Problem-solving assistance for both SMEs and large corporations
• Export facilitation and promotional activities

EXIM Bank Financial Relief Package

The Export-Import Bank of Thailand has implemented comprehensive financial support measures including:

Liquidity Enhancement Programs:

• Extended repayment terms up to 365 days to alleviate cash flow pressures
• Interest rate reductions of up to 20% for existing and new loan facilities
• Pre and post-export revolving credit facilities providing low-interest working capital

Specialized Financing Solutions:

• Pre-emptive principal repayment holidays extending up to one year for qualifying long-term borrowers
• Transformation loans starting at 2.75% interest for production upgrades and automation initiatives
• Post-shipment working capital loans with export insurance (EXIM Safe Trade) providing protection against buyer default

Market Diversification Support:

• Trade Fair Participation Loans (EXIM Department of International Trade Promotion Empower Financing) for overseas market exploration
• SME support loans in partnership with the Social Security Office, starting at 2.00% interest, to maintain employment levels and operational stability

Strategic Outlook

The implementation of restrictive U.S. trade measures presents substantial challenges for Thai export sectors. While the Thai government has initiated comprehensive mitigation strategies, ongoing monitoring and assessment of their effectiveness remains critical. In an increasingly volatile global trade environment, Thailand must maintain agility, proactive policy development, and adaptive capacity to preserve its competitive position in evolving international markets.

The success of these measures will largely depend on their implementation efficiency, private sector engagement, and the ability to identify and capitalize on alternative market opportunities while maintaining strong bilateral relationships with key trading partners.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

• PDPA: Cross-Border Data Transfer Compliance for Bank Z Under Thailand’s Data Protection Law – Key Takeaways
• PDPA: Does Removing a Name Make Data Anonymous?
• PDPA: Disclosure of Personal Data to Third Parties for Legal Proceedings
• PDPA: Applicability to a Facebook User’s Posting of Personal Data – Key Takeaways
• Consumer Protection: Proposed Labeling Rules for Solar Panels, Inverters and Energy-Storage Batteries
• Generative AI and Music: Copyright Risks Highlighted by the DIP

The Ripple Effect EP. 10: Thailand–U.S. Tariff Agreement: Navigating the Reduction from 36% to 19%

Following intensive diplomatic negotiations, Thailand has successfully secured a substantial reduction in U.S. import tariffs from 36% to 19%, effective August 1, 2025. This agreement represents a significant diplomatic and economic achievement that will enhance Thailand’s export competitiveness and strengthen bilateral trade relations.

Background of Thailand–U.S. Tariff Negotiations

On July 7, 2025, the United States government formally notified Thailand of its intention to impose a 36% tariff on Thai imports, scheduled to take effect on August 1, 2025. This proposed tariff threatened to significantly impact Thailand’s international trade sector and prompted immediate diplomatic action.

The Thai government responded swiftly by initiating comprehensive diplomatic engagement with U.S. authorities to seek reconsideration and reduction of the proposed tariff rates. On July 17, 2025, the Minister of Finance formally commenced trade negotiations with the Office of the United States Trade Representative (USTR) by submitting a comprehensive revised trade package. This proposal included:

• Reciprocal tariff reductions on various U.S. goods
• Expanded market access for U.S. products
• Enhanced investment opportunities for U.S. companies in Thailand

Following the USTR’s feedback and additional queries, Thailand refined its proposal through multiple iterations. On July 23, 2025, Thailand submitted its final trade proposal to the USTR, representing the culmination of intensive negotiations during which Thailand had already presented over 90% of its revised trade offers.

The final phase of negotiations occurred on July 29, 2025, when the Minister of Finance and the Thai delegation conducted another round of high-level discussions with the USTR. During this meeting, the USTR presented a final draft document for submission to the U.S. President, which the Thai delegation reviewed and returned, marking one of the final procedural steps before the formal presidential announcement.

Negotiation Outcome

On July 31, 2025, the White House officially announced through its website that Thailand had successfully negotiated a reciprocal tariff agreement with the United States, achieving a significant reduction in import duties on Thai goods from 36% to 19%.

Key Implementation Details

• Effective Date: The new 19% tariff rate takes effect on August 1, 2025
• Transition Period: Shipments currently in transit will remain subject to the existing 10% tariff rate
• Full Implementation: The new tariff structure will be fully operational by August 7, 2025
• Enforcement Measures: Goods involved in transshipment or tariff evasion will face a penalty rate of 40%

This reduction is expected to significantly enhance Thailand’s competitiveness in the U.S. market while bolstering investor confidence in Thailand’s economic prospects.

Strategic Government Support

1. Financial Support Mechanisms for Entrepreneurs

The Thai government has developed targeted support measures for domestic entrepreneurs affected by the evolving U.S. tariff environment:

Soft Loan Program: Implementation of low-interest loan facilities designed to enhance liquidity for affected businesses and maintain operational continuity.

Capital Enhancement Fund: Establishment of a dedicated THB 10 billion fund to strengthen business capabilities and competitiveness. The Federation of Thai Industries and the Thai Chamber of Commerce have been designated as implementing partners responsible for:

• Data collection and entrepreneur classification
• Facilitating machinery modernization initiatives
• Supporting production efficiency improvements

2. Economic Restructuring and Investment Enhancement

The government has committed to comprehensive economic reform aimed at increasing domestic investment from the current average of 20% to 35% of GDP. Key strategic elements include:

Short-term Objectives:

• Maintaining economic growth rate targets of 3% for the second quarter
• Managing transition challenges while preserving economic stability

Long-term Vision:

• Adoption of advanced technologies to address structural investment constraints
• Systematic removal of barriers that have historically limited investment growth
• Achievement of sustained investment levels between 30-35% of GDP to ensure long-term economic stability

Conclusion and Outlook

The successful reduction of U.S. tariffs on Thai goods from 36% to 19% demonstrates Thailand’s diplomatic effectiveness and commitment to strengthening bilateral trade relations. This achievement will deliver tangible benefits including:

• Reduced export costs for Thai manufacturers
• Expanded market access opportunities in the U.S.
• Enhanced competitive positioning for Thai products
• Increased investor confidence in Thailand’s economic resilience

The agreement positions Thailand favorably for sustained export growth while reinforcing its status as a reliable trading partner. Moving forward, continued monitoring of policy implementation and adaptive measures will be essential to maximize the benefits of this tariff reduction and maintain Thailand’s competitive advantage in the evolving global trade environment.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

• PDPA: Cross-Border Data Transfer Compliance for Bank Z Under Thailand’s Data Protection Law – Key Takeaways
• PDPA: Does Removing a Name Make Data Anonymous?
• PDPA: Disclosure of Personal Data to Third Parties for Legal Proceedings
• PDPA: Applicability to a Facebook User’s Posting of Personal Data – Key Takeaways
• Consumer Protection: Proposed Labeling Rules for Solar Panels, Inverters and Energy-Storage Batteries
• Generative AI and Music: Copyright Risks Highlighted by the DIP

The Ripple Effect EP. 9: Navigating Tariffs and Technology Controls: Thailand’s Strategic Response to U.S. Trade Pressures

Thailand is currently navigating a rapidly evolving trade landscape marked by two significant challenges. Firstly, the United States set to increase tariffs on selected Thai exports to 36%, effective on August 1, 2025. Secondly, the U.S. Department of Commerce is reportedly considering stricter export controls on high-performance NVIDIA AI chips destined for particular countries, including Thailand, citing concerns about potential transshipment to China. These developments could have substantial implications for Thailand’s trade relations and regulatory compliance framework.

In response, the Thai government has implemented swift and strategic measures, including initiating diplomatic engagements with U.S. counterparts, implementing targeted investment promotion strategies, and enhancing oversight of advanced technologies to ensure compliance with international trade regulations.

Trade Negotiations and Economic Safeguards

The Finance Minister has proposed offering tariff exemptions on selected U.S. imports as leverage to negotiate the reduction of retaliatory tariffs from 36% to levels comparable to those imposed on Vietnam and Indonesia—approximately 20%.

1. Selective Market Opening

Thailand is prepared to reduce tariffs—potentially to 0%—on U.S. goods that the country does not produce or cannot produce in sufficient quantities, such as specific agricultural or industrial products. However, this market access must not conflict with Thailand’s commitments under existing Free Trade Agreements (FTAs). Thai agricultural producers will remain protected under these arrangements.

2. Promoting Thai Investment in the United States

The U.S. seeks to boost domestic manufacturing and exports, while Thailand aims to increase investment in processed agriculture and energy sectors. On the other hand, the U.S. currently maintains an energy surplus, offering natural gas at significantly reduced prices (2–3 USD per million BTU compared to the market price of 10–11 USD) to Thailand.

3. Preventing Origin Fraud and Promoting Local Content

The U.S. has proposed stricter local content requirements, potentially increasing from 40% to 60–70%, to prevent the misuse of trade privileges. However, Thai business operators view this as an opportunity to boost domestic production and strengthen the local supply chain. By relying more on local content, Thailand can create opportunities for its manufacturers to enhance their production capabilities and become more competitive in global markets.

Small and Medium Enterprise (SME) Support Measures

To mitigate the impact on Thai SMEs and the agricultural sector, the government plans to allocate 200 billion THB in soft loans through state-owned banks, with interest rates as low as 0.01%. This initiative will support investment, employment, inventory management, and other operational costs. The government will subsidize the standard 2% interest rate as part of its comprehensive business relief measures.

Board of Investment (BOI) Measures to Retain Investment

Following the U.S. government’s announcement of reciprocal tariffs over the past two months, Thailand’s BOI has consulted with both domestic and foreign investors and introduced a comprehensive policy package. This initiative addresses two primary objectives:

1. Enhancing Thai Business Competitiveness and Strengthening Domestic Supply Chains

a. SME Efficiency Support: Thai SMEs are encouraged to invest in upgrades including machinery modernization, automation, energy efficiency improvements, and sustainable practices. Tax incentives have been enhanced from a 3-year exemption at 50% of investment value to a 5-year exemption at 100%.

b. Local Content Promotion: Companies in the electric vehicle (EV) and electronics sectors that meet specific local content requirements and obtain “Made in Thailand” certification will receive an additional 2-year corporate income tax reduction of 50%.

2. Mitigating Risks from U.S. Trade Measures and Regulating Specific Sectors

a. Enhanced Production Process Requirements: For sensitive industries (e.g., automotive parts, electronics, metals), the BOI now mandates clearly defined transformation of raw materials, requiring a change in customs tariff classification of at least four digits to ensure value-added production within Thailand.

b. Investment Regulation in High-Risk or Oversupplied Sectors: The BOI will discontinue promotion of specific low-technology or oversupplied industries (e.g., solar panels, furniture, long steel products). Certain sectors must maintain majority Thai ownership unless located in designated economic zones.

c. Foreign Labor Regulation Adjustments: Manufacturing facilities employing over 100 staffs must maintain a workforce that is at least 70% Thai nationals to ensure local employment benefits.

These incentives aim to attract foreign manufacturers to Thailand, strengthen supply chain integrity, and enhance the country’s overall economic resilience.

U.S. AI Chip Export Controls and Regional Implications

The U.S. has intensified export controls on advanced AI chips to prevent potential rerouting to China—a measure that could disrupt regional digital infrastructure projects. However, the Federation of Thai Industries (FTI) has clarified that such restrictions are unlikely to impact legitimate initiatives, including Amazon Web Services’ (AWS) has planned to set up data center in Thailand.

Current U.S. measures primarily target transshipment risks rather than restricting local deployment. Nevertheless, uncertainties persist, particularly regarding the scope and enforcement of these controls. For instance, U.S. regulations prohibit foreign data centers from exceeding the processing capacity of their American counterparts, and chipmaker NVIDIA is already prioritizing U.S.-based clients due to supply constraints.

Given these challenges, Thailand must continue monitoring U.S. policy developments closely while accelerating digital infrastructure upgrades and ensuring regulatory transparency.

Conclusion: A Unified and Strategic Path Forward

Thailand’s evolving role in global trade necessitates, a comprehensive strategy to address rising tariffs, technological scrutiny and pragmatic diplomatic approach and reinforcing investor confidence through proactive BOI measures and credible technology governance, Thailand can establish itself as a trustworthy and resilient economic partner.

The path forward requires coherence between domestic policy, international engagement, and innovation readiness, ensuring that Thailand not only weathers current economic headwinds but emerges stronger in the global economic arena.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

• PDPA: Cross-Border Data Transfer Compliance for Bank Z Under Thailand’s Data Protection Law – Key Takeaways
• PDPA: Does Removing a Name Make Data Anonymous?
• PDPA: Disclosure of Personal Data to Third Parties for Legal Proceedings
• PDPA: Applicability to a Facebook User’s Posting of Personal Data – Key Takeaways
• Consumer Protection: Proposed Labeling Rules for Solar Panels, Inverters and Energy-Storage Batteries
• Generative AI and Music: Copyright Risks Highlighted by the DIP

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.

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.

Other Articles

• PDPA: Cross-Border Data Transfer Compliance for Bank Z Under Thailand’s Data Protection Law – Key Takeaways
• PDPA: Does Removing a Name Make Data Anonymous?
• PDPA: Disclosure of Personal Data to Third Parties for Legal Proceedings
• PDPA: Applicability to a Facebook User’s Posting of Personal Data – Key Takeaways
• Consumer Protection: Proposed Labeling Rules for Solar Panels, Inverters and Energy-Storage Batteries
• Generative AI and Music: Copyright Risks Highlighted by the DIP

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.

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.

Other Articles

• PDPA: Cross-Border Data Transfer Compliance for Bank Z Under Thailand’s Data Protection Law – Key Takeaways
• PDPA: Does Removing a Name Make Data Anonymous?
• PDPA: Disclosure of Personal Data to Third Parties for Legal Proceedings
• PDPA: Applicability to a Facebook User’s Posting of Personal Data – Key Takeaways
• Consumer Protection: Proposed Labeling Rules for Solar Panels, Inverters and Energy-Storage Batteries
• Generative AI and Music: Copyright Risks Highlighted by the DIP

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.

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.

Other Articles

• PDPA: Cross-Border Data Transfer Compliance for Bank Z Under Thailand’s Data Protection Law – Key Takeaways
• PDPA: Does Removing a Name Make Data Anonymous?
• PDPA: Disclosure of Personal Data to Third Parties for Legal Proceedings
• PDPA: Applicability to a Facebook User’s Posting of Personal Data – Key Takeaways
• Consumer Protection: Proposed Labeling Rules for Solar Panels, Inverters and Energy-Storage Batteries
• Generative AI and Music: Copyright Risks Highlighted by the DIP

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.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

• PDPA: Cross-Border Data Transfer Compliance for Bank Z Under Thailand’s Data Protection Law – Key Takeaways
• PDPA: Does Removing a Name Make Data Anonymous?
• PDPA: Disclosure of Personal Data to Third Parties for Legal Proceedings
• PDPA: Applicability to a Facebook User’s Posting of Personal Data – Key Takeaways
• Consumer Protection: Proposed Labeling Rules for Solar Panels, Inverters and Energy-Storage Batteries
• Generative AI and Music: Copyright Risks Highlighted by the DIP

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.

Other Articles

• PDPA: Cross-Border Data Transfer Compliance for Bank Z Under Thailand’s Data Protection Law – Key Takeaways
• PDPA: Does Removing a Name Make Data Anonymous?
• PDPA: Disclosure of Personal Data to Third Parties for Legal Proceedings
• PDPA: Applicability to a Facebook User’s Posting of Personal Data – Key Takeaways
• Consumer Protection: Proposed Labeling Rules for Solar Panels, Inverters and Energy-Storage Batteries
• Generative AI and Music: Copyright Risks Highlighted by the DIP

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.

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.

Other Articles

• PDPA: Cross-Border Data Transfer Compliance for Bank Z Under Thailand’s Data Protection Law – Key Takeaways
• PDPA: Does Removing a Name Make Data Anonymous?
• PDPA: Disclosure of Personal Data to Third Parties for Legal Proceedings
• PDPA: Applicability to a Facebook User’s Posting of Personal Data – Key Takeaways
• Consumer Protection: Proposed Labeling Rules for Solar Panels, Inverters and Energy-Storage Batteries
• Generative AI and Music: Copyright Risks Highlighted by the DIP