Thailand Faces 12.5% U.S. Tariff Amid Trade Deficit Concerns
The U.S. imposed a 12.5% tariff on Thai goods, the highest rate alongside China and Vietnam, citing forced labor concerns and threatening to erode Thailand's export competitiveness. Thailand's first-half trade deficit hit 1.1 trillion baht,
On July 25, 2025, Pichai Naripthaphan, former Commerce Minister, stated that the United States has announced a 12.5% tariff on Thai goods—the highest rate—citing forced labor violations. Thailand faces the same rate as China and Vietnam, while Malaysia, Indonesia, and the Philippines are charged only 10%, which will erode Thai competitiveness, harm exports, and discourage investment.
Although Thai exports surged 20.74% in June, imports jumped 50.28%, leaving Thailand with a first-half trade deficit of 1.1 trillion baht and potentially record deficits by year-end. This threatens to create a twin deficit crisis affecting GDP. In the first six months of 2025, Thailand held a 33 billion dollar trade surplus with the U.S. but ran a 46.2 billion dollar deficit with China—likely prompting the high U.S. tariff and risking further increases if Washington suspects transshipment or circumvention schemes to evade tariffs.
Pichai criticized the slow pace of negotiations, noting that Deputy Prime Minister and Commerce Minister Supratarp Suphajee met USTR Jamieson Greer only briefly in May and negotiated with Deputy USTR Rick Switzer in June—warning signs he had flagged earlier. He urged faster action and praised Wuttikrai Livirapat, Permanent Secretary of Commerce, and Chotima Iamsawatdi, Director-General of the Trade Negotiations Department, as key figures who previously helped secure Thailand's exemption from Section 301 tariffs under President Biden and should lead current efforts to close an FTA and meet performance targets.
