Thailand’s negotiators are scheduled to hold tariff talks with the US Trade Representative (USTR) via video conference soon, amidst concerns from the Thai private sector and a House committee that Thailand may follow the footsteps of Vietnam and Indonesia, by proposing the removal of all tariffs on imports of US goods, in exchange for substantial tariff cuts.
Indonesia is reported to be close to a trade deal with the US, after the Trump administration agreed to reduce the tariff to 19%, while the tariff on Vietnam’s goods imported into the US has been reduced to 20%.
The tariff rates for Malaysia, the Philippines and Singapore are 25%, 20% and 10% respectively, while the tariff on Thai goods remains at 36%, pending the outcome of negotiations.
Commerce Minister Jatuporn Buruspat disclosed that he was told on Wednesday, by Finance Minister Pichai Chunhavajira, head of Thailand’s negotiating team, that they are preparing for imminent tariff talks with the USTR.
He said the Thai team will propose tariff exemption for tens of thousands of imports from the US, in the hope that the US will reduce the 36% tariff to a level at which Thai imports to the US market can be as competitive as imports from the other ASEAN member countries.
He noted, however, that the talks may not be concluded in a single session.
Meanwhile, Nava Chanthasurakhon, vice president of the Federation of Thai Industries, said that representatives of 47 industrial groups have warned that Thailand will stand to lose substantially if the Thai team proposes tariff exemptions for all imports from the US, similar to Vietnam and Indonesia.
They have, however, agreed to accept zero tariffs on some items from the US, said Nava.
Kobsak Pootrakool, executive vice president of Bangkok Bank, noted that zero tariffs on all imports from the US appears to be a norm for ASEAN countries.
He advised the negotiators not to protect Thai industrial groups which may put Thailand at risk of facing 36% tariffs, which would, in turn, impact the entire export sector.
Outgoing central bank governor Sethaput Suthiwartnarueput said that the bank is waiting for the outcome of the tariff talks before it can assess the impacts, adding, however, that the most important thing for the government is to prepare measures to help the affected industries, such as electrical appliances and clothing, which could be faced by a flood of imports from the US.
Chair of the Senate Committee on Commerce and Industries, Wiwat Kraiphisitkul, advised the Thai team not to follow in the footsteps of Vietnam and Indonesia, by giving in too much to US pressure, because doing so would seriously impact tens of thousands of SMEs in Thailand.
He said Thailand should accept the 36% tariff, to protect SMEs, and help major Thai exporters with a 10% cut in corporate income tax and by securing soft loans for them.
He noted that Thai exports to the US market account for 18% of all exports, compared to Vietnam’s 30%, which explains why Vietnam agreed to remove tariffs from all imports from the US.
