The White House announced the new tariff policy, saying the US faces “a persistent trade deficit driven by the absence of reciprocity in our trade relationships”, reports the Bangkok Post.
Thailand is bearing the brunt of stiff tariffs, scheduled to go into effect on Apr 9.
“The 37% tariff is higher than the FTI’s estimate of 10-15%,” said Kriengkrai Thiennukul, chairman of the FTI.
Discussions among exporters to the US are needed as the new tariffs may affect many industries and international trade, Mr Kriengkrai said.
Foreign cars shipped to the US also face a 25% tariff, which took effect Apr 3, according to media reports.
The Thai automotive industry is already struggling with a decline in vehicle exports and domestic sales.
Vehicle exports slowed during the first two months this year, with the volume plunging by 18.1% year-on-year to 143,644 units, while domestic sales declined by 9.53% to 97,395 vehicles during the period, according to the FTI’s Automotive Industry Club.
The high level of household debt significantly affected domestic sales, while the decrease in car exports resulted from many factors, including Washington’s trade policy.
This policy led Thailand’s trading partners to reduce purchases of mostly internal combustion engine-powered cars as they awaited a clearer tariff policy from US President Donald Trump, said the FTI’s Automotive Industry Club.
The government should launch measures to help the automotive sector and other industries affected by the new US levies, said Suwat Supakandechakul, President of Thai Automotive Industry Association.
It was not a surprise to see Trump impose a 37% tariff on Thai products because Thailand’s trade surplus with the US was the 11th-largest globally at more than US$35 billion, or B1.2 trillion, in 2024, said Mr Suwat. (The Office of the US Trade Representative reported Thailand’s trade surplus with the US totalled US$45 billion last year.)
US firms that produce electronics, especially hard disk drives, and export them back to their countries are one factor behind this trade surplus, Mr Kriengkrai said.
Thailand may need to reduce imports from some countries in order to buy more US goods to deal with the trade surplus, said an executive at PTT Group who requested anonymity.
“We have to manage our demand for overseas products by focusing on those made in the US,” the source said.
Thailand usually buys liquefied natural gas from the Middle East, so it may consider buying more LNG from the US.
This shift can also be applied to increased purchases of US-made aircraft, said the source.