Bangkok: Thailand will not be significantly impacted by the 12.5% US tariff; the issue of "overproduction" needs to be monitored. The President of the Thai Chamber of Commerce assessed that the US Section 301 tariff of 12.5% is unlikely to severely impact Thailand, as most competing countries face similar rates, with only a few countries subject to 10% tariffs. He pointed out that Thailand's high tariff ceiling is primarily due to the lack of a law directly prohibiting the import of goods subject to forced labor. However, he emphasized that the crucial point moving forward will be the outcome of negotiations on the issue of overcapacity. The private sector proposed accelerating the enactment of laws and measures regarding forced labor that align with international standards and continuing negotiations on reciprocal trade agreements.
According to Thai News Agency, Dr. Poj Aramwattananon, Chairman of the Thai Chamber of Commerce and the Federation of Thai Chambers of Commerce, commented on the U.S. Trade Representative's (USTR) announcement of Section 301 tariffs on 60 economies worldwide, with Thailand subject to a 12.5% tariff. He stated that Thai businesses are closely monitoring the situation. Although Thailand is subject to this rate, most major competitors are also affected at similar rates, meaning competition in the U.S. market remains under similar conditions.
While countries receiving a 10% tax rate may have some cost advantage, the difference is not as wide as with previous tax measures, and therefore it is not a factor that will significantly impact the competitiveness of Thai businesses.
Dr. Poj said that the United States focuses on two main issues: preventing the import of goods produced using forced labor and the problem of structural excess capacity. Regarding forced labor, the private sector believes that Thailand has not had a systemic forced labor problem for a long time. However, it is still necessary to accelerate the enforcement of related laws and measures to build confidence among trading partners and elevate standards to meet international levels. This will increase Thailand's chances of receiving better terms in the future.
Regarding the issue of excess production capacity, the President of the Thai Chamber of Commerce stated that it is a matter that needs close monitoring because the USTR is still conducting a separate investigation and there may be additional trade measures in the future. Therefore, Thailand should expedite the conclusion of the Agreement on Reciprocal Trade (ART) and continue negotiations with the United States to maintain trade balance and reduce the risks from future measures.
"The most important thing right now is for the government and private sector to work closely together to prepare information and determine the position for trade negotiations with the United States to achieve mutually beneficial results. This includes accelerating the push for trade agreements that will help reduce obstacles and maintain Thailand's long-term competitiveness," Dr. Poj said.
The Thai Chamber of Commerce is ready to act as a representative of the private sector in gathering information, suggestions, and impacts from businesses. The University of the Thai Chamber of Commerce has already prepared a summary and survey results for submission to the Ministry of Commerce to be used in negotiations with the United States. The Chamber reiterated that the private sector is fully committed to supporting the government's operations in safeguarding national interests while building confidence among investors and international trading partners.
Dr. Poj also stated that Thailand should use this opportunity to accelerate the upgrading of labor standards, increase the transparency of the supply chain, and move forward with trade agreement negotiations in order to transform the pressure from US measures into an opportunity to enhance the country's long-term competitiveness.