Commerce Ministry Prepares US Trip to Address Section 301 Tariff Concerns; Worried SMEs May Struggle to Adapt

Arada Fuengtong, director-general of the Department of Trade Negotiations at the Commerce Ministry, disclosed that a government delegation comprising representatives from the Commerce Ministry, Department of Trade Negotiations, Customs Department, Board of Investment, Foreign Ministry, and Labor Ministry will travel to the United States between May 13-14 to clarify and provide detailed responses to the US Trade Representative (USTR) regarding Section 301 investigations. The ministry previously submitted clarifications, responses, and supporting documents on April 15 regarding two cases under investigation: excess production capacity and forced labor practices.

The two investigated cases are: 1) Accusations of using excess production capacity in three industries—automobiles and parts, rubber products, and electrical-electronic appliances—which could result in additional tariffs. Thailand has already clarified it does not use excess capacity. 2) Imports of goods from countries using forced labor, with allegations against 60 countries including Thailand. The investigation focuses on whether countries import raw materials or goods involving forced labor. Thailand is currently drafting a labor law to enable traceability to production sources and labor practices.

"Both issues raised by the US concern me greatly, particularly regarding SME producers," Arada stated. "Large manufacturers can adapt quickly for exports, but if the US applies blanket measures, SMEs may struggle to keep pace—each faces different readiness levels. Regarding forced labor, the US hasn't specified which products are under investigation, which is concerning. Even though Thailand doesn't use forced labor, if the US applies uniform rates across all countries, Thailand—especially SMEs—could suffer significant damage. Regardless of the outcome, we are prepared to continue clarifying the facts."