Thailand will negotiate with US on tariffs, says Paetongtarn
Thailand will negotiate with US on tariffs, says Paetongtarn
Thailand will negotiate with the United States on tariffs, Prime Minister Paetongtarn Shinawatra said on Thursday, hours after US President Donald Trump announced sweeping tariffs on imports from many countries to the US.
“We won’t let it get to where GDP will miss the target,” Ms Paetongtarn told reporters. “We have a strong plan.”
“We have prepared several steps, including sending our permanent secretary to talk with them. … I think we can still negotiate.”
Deputy Finance Minister Julapun Amornvivat said the government was not surprised to be hit with tariffs, though the 36% level was higher than anticipated.
“We have to negotiate with understanding, not aggressive talk, but we have to talk about which products they feel are unfair and we have to see whether we can adjust,” he said in a video interview posted online.
Thailand’s trade surplus with the US totalled $45 billion last year, according to the Office of the US Trade Representative. The country had adopted a wait-and-see strategy in the run-up to the tariff announcement and promised to step up imports of energy and food products to cut the trade surplus.
The US is Thailand’s largest export market with electronics, machinery and agricultural products topping the list of goods.
The 36% tariff was higher than Thai businesses expected, Thai Chamber of Commerce chairman Poj Aramwattananont said, urging the government for speedy negotiations. The business group was not expecting the US to slap more than a 25% tariff on Thai goods, he said.
“Don’t panic as other countries are also facing higher tariffs,” Mr Poj said. “The US will also have some impact from this as they still can’t produce to replace the imports fast enough,” he said.
The reciprocal tariffs could shrink Thai gross domestic product (GDP) by as much as 1.2 percentage points from a forecast of 2.5%, with the one projected interest rate cut by the Bank of Thailand (BoT) doing very little to shore up the economy, according to InnovestX Securities.
Thailand is on the “Dirty 15” list of countries that could be affected by Trump tariffs. On average, the US tariff on Thai imports is 2%, while Thailand levies an average tariff of 8% on American products.
Meanwhile, Southeast Asian currencies and stocks declined on Thursday after Asian emerging nations were given some of the biggest tariff increases by President Trump.
The Thai baht slipped as much as 0.8% against the US dollar, while the Malaysian ringgit and South Korean won also weakened.
Singapore’s main stock index fell as much as 1.3% before trimming losses, while Malaysia’s dropped 0.7%. Southeast Asian equities were already some of the world’s worst performers this year.
“The worst-hit region by this tariff announcement is undoubtedly Asian EM,” ING Bank analysts Padhraic Garvey and Francesco Pesole wrote in a client note. Global risk-off should be a common theme, and this should be accompanied by lower market rates, they said.
Southeast Asia was hit particularly hard by the reciprocal tariffs announced by Trump on Wednesday. The US will increase levies on Vietnam’s exports 46%, Thailand’s by 36% and Indonesia’s by 32%. The region’s largest trading partner — China — was heavily targeted, with Beijing now facing a cumulative 54% tariff.
Investors are now awaiting any retaliatory response from tariff recipients, which may further escalate global trade tensions. While nations such as Australia have explicitly ruled out retaliation, investors are watching a response from economies such as China.
