PATTAYA, Thailand – Thailand is accelerating efforts to finalize a reciprocal trade agreement with the United States before the end of June after the U.S. Trade Representative (USTR) placed Thailand among countries facing a proposed 12.5% tariff under an ongoing Section 301 trade investigation.
According to Deputy Prime Minister and Commerce Minister Suphajee Suthumpun, the USTR’s preliminary findings divided more than 60 trading partners into two groups. Thailand is among 46 countries facing the higher 12.5% tariff rate because it has not yet signed an Agreement on Reciprocal Trade (ART) with the United States and lacks certain measures related to imports linked to forced labor concerns. A second group of 14 countries faces a lower 10% tariff rate after implementing relevant restrictions or concluding reciprocal trade arrangements with Washington.
Thai officials believe that successfully concluding the ART negotiations could help reduce Thailand’s tariff exposure from 12.5% to 10%.
Negotiations Enter Final Stage
The Commerce Ministry said approximately 25 outstanding issues remain under discussion across several government agencies. Thai trade representatives have been dispatched to Washington, D.C., for intensive negotiations over the coming weeks, with U.S. officials reportedly placing Thailand among their priority negotiating partners. Thailand is also seeking to expand the list of products exempt from any additional tariffs.
Thousands of Export Products at Stake
The potential impact is significant. Thailand currently exports more than 10,000 product categories to the United States. While 1,655 items listed under Annex A would remain exempt, including laptops, smartphones, integrated circuits, natural rubber products, cassava starch, durian, processed pineapple, coconut products, civil aviation components, and precious metals, more than 8,000 other product categories could face higher duties if negotiations fail. Business groups are closely watching developments, as the United States remains one of Thailand’s most important export markets.
Fresh Concerns Over Excess Production Claims
Thailand is also awaiting a separate U.S. determination regarding alleged excess production capacity in three industries: electronics, rubber, and machinery. American authorities are expected to announce findings later this month. Thai officials dispute U.S. figures, arguing that domestic data shows factory utilization rates ranging from 70% to 95%, substantially higher than the 60% level cited by U.S. investigators. Even so, officials acknowledge there is no guarantee Washington will accept Thailand’s arguments.
July Deadline Approaches
The U.S. timeline gives Thailand until June 22 to formally participate in the consultation process. Written submissions are due by July 6, followed by public hearings beginning July 7. Final rebuttals must be submitted by July 12, with tariff decisions expected before July 24. Thai officials say securing a reciprocal trade agreement before those deadlines remains the country’s best opportunity to avoid additional tariffs and prevent exporters from facing multiple layers of trade penalties.
