Friday Deadline Looms

Thailand is gearing up to present its initial trade proposal to the United States on June 20, 2025, as confirmed by Vuttikrai Leewiraphan, permanent secretary of the Ministry of Commerce, on June 18, 2025. Leading the negotiation team, Vuttikrai announced that recent video conference discussions with the US Trade Representative (USTR) office have shaped the proposal, aiming to address critical trade imbalances before a looming tariff deadline.

US Outlines Key Negotiation Areas

Five-Point Framework Proposed

The USTR has outlined five focus areas for balanced trade: tariff measures and quotas, non-tariff barriers, digital trade management, rules of origin, and economic and national security. Thailand’s proposal, due Friday, will respond to these priorities, building on a prior one-page framework that suggested lowering import tariffs, purchasing Boeing aircraft and weapons, and easing non-tariff barriers. This strategic response aims to mitigate the threat of higher US tariffs.

Tariff Threat Drives Urgency

July 9 Deadline Approaches

With less than three weeks until July 9, 2025, when a 90-day US tariff pause expires, Thailand faces a potential 36% tariff on its exports if no deal is reached. Currently capped at 10%, the tariffs could severely impact Thailand’s economy, particularly its $31 billion export surge in May, driven by a 35% increase in US-bound shipments. The urgency to finalize negotiations underscores the high stakes for Thailand’s trade-dependent market.

Optimism for Negotiation Outcomes

Potential Tariff Cap at 10%

Vuttikrai expressed confidence that Thailand’s proposal could lead to favorable negotiations, potentially securing a maximum 10% tariff rate. He suggested the US might extend talks beyond July 9 if needed, allowing more time to refine agreements. The proposal’s comprehensive approach, addressing US concerns while promoting mutual benefits, is expected to pave the way for deeper discussions, bolstering Thailand’s position in the talks.

Export Boom Amid Tariff Fears

May’s Record-Breaking Shipments

Thailand’s exports in May 2025 soared by 18.4% year-on-year to $31 billion, fueled by preemptive shipments to the US to avoid anticipated tariffs. For the first five months, exports rose 14.9% to $138.2 billion, though a trade deficit of $1.12 billion emerged due to 11.3% import growth. However, the Thai Chamber of Commerce predicts a June export decline, highlighting the need for a swift resolution to tariff uncertainties.

Long-Term Trade Strategy

Diversifying Export Markets

Poj Aramwattananont, chairman of the Thai Chamber of Commerce, emphasized the importance of monitoring US tariff developments post-July 9 to sustain double-digit export growth in 2025. Thailand’s strategy includes diversifying export markets to reduce reliance on the US, which accounts for 18.3% of its shipments. By balancing increased US imports and tariff reductions, Thailand aims to maintain economic stability amid global trade tensions.

Strengthening Bilateral Ties

Holistic Approach to Negotiations

Thailand’s negotiation team, adopting a “holistic approach,” seeks to foster long-term trade harmony with the US, its largest export market. By addressing tariff and non-tariff barriers while boosting US imports like energy and agricultural products, Thailand aims to halve its $45 billion trade surplus within five years. This proactive stance, backed by private sector support, positions Thailand to navigate the complex US trade landscape effectively.

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