Thailand must urgently reform its industrial and agricultural sectors, which could suffer major negative impacts if the market opens to US products as part of ongoing tariff negotiations, says a leading economist at the Thailand Development Research Institute (TDRI).
Dr. Kirida Bhaopichitr, Director of the TDRI Economic Intelligence Service, noted that, while Indonesia has finalised its deal with US, to cap its tariff at 19%, Thailand is still struggling to reduce its own from 36%.
Finance Minister Pichai Chunhavajira has proposed partially opening Thailand’s market to U.S. goods, but Kirida said stronger government support is needed to help Thai businesses upgrade.
“The government’s assistance to the agricultural and industrial sectors should not be limited to cash handouts. It must also include immediate funding and policy support, to help these sectors transform and be more competitive,” she said.
The Finance Ministry recently announced a plan to cooperate with state-owned banks, to provide 200 billion baht in soft loans, aimed at supporting small and medium-sized enterprises (SMEs).
Despite slow progress in the tariff negotiations with the U.S., Kirida highlighted several industries where Thailand can still maintain its competitiveness. She noted that Thai jewellery and biotechnology products could continue to perform well in the U.S. market, even if tariffs remain high.
Dr. Kirida Bhaopichitr, Director of the TDRI Economic Intelligence Service
“Jewellery remains among Thailand’s top 20 exports to the U.S., thanks to its strong price-to-quality ratio and continued high demand. Thailand also has the capacity to produce competitive biotechnology products, given its strong agricultural base. Raw silk is another item that continues to see solid demand in the U.S.,” she explained.
While these products may help support export growth this year, Dr. Kirida warned that overall export growth could slow to just 1% in 2025, if tariffs are not reduced.
With the U.S. market accounting for approximately 18% of Thailand’s total exports, she warned that the country may face export contraction in the second half of 2025, adding that diversifying Thailand’s export markets will be critical to mitigating the risks.
“Thailand might consider signing a free trade agreement with the European Union. This could help us diversify export markets and reduce reliance on any single partner. We may still see a contraction in Q3 and Q4 this year, though, due to ongoing tariff tensions,” she added.
By Franc Han Shih, Thai PBS World
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