New U.S. Tariffs Hit Thailand: What It Means for Trade

Thailand Faces Economic Pressure as U.S. Imposes 37% Tariffs, Threatening Key Export Sectors

The United States has rolled out sweeping tariff hikes, impacting Thailand’s $63.3 billion export market. Effective April 5, a 10% baseline tariff applies to all Thai goods entering the U.S., followed by a 37% “reciprocal” rate on April 9. This is a steep increase from the previous average of only 2%. Announced by President Trump on April 2, these protectionist measures aim to address trade imbalances, with Thailand’s $36 billion surplus in 2024 being a key trigger.

Contrary to a direct tit-for-tat, the “reciprocal” label does not mirror Thailand’s modest 8-10% tariffs on U.S. imports. Instead, it’s a calculated penalty, factoring in the surplus and adjusted via a formula (tariffs on U.S. goods plus a surplus multiplier, halved). This jumps Thailand’s rate far beyond its own levies, unlike a pure reciprocal model. China faces a steeper 60%, while allies like Canada may see leniency.

For Thailand, the stakes are high. The U.S. absorbs 18.3% of its exports – electronics, machinery, rubber -now at risk of losing competitiveness. A potential revenue hit looms unless firms pivot to markets like ASEAN or absorb costs, straining an economy reliant on trade (GDP ~$500 billion). Vietnam or India, with possibly lower rates, could gain an edge in regional supply chains.The tariffs’ full scope – specific goods, legal challenges, or negotiations – remains fluid. Thai exporters face immediate compliance hurdles and cost recalculations, while U.S. importers may shift sourcing. Our firm is ready to advise on trade law adjustments, tariff mitigation, and strategic pivots.

Contact us to navigate this shift.