Thailand is signaling a deliberate, negotiation-by-design approach to the ongoing trade talks with the United States, stressing that any move toward reducing tariffs must balance gains for exporters with the protection of domestic producers. Deputy Finance Minister Paopoom Rojanasakul underscored that Thailand will not agree to erase tariffs to zero on all US goods during the discussions, arguing that such a blanket concession could ripple across strategic sectors and harm farmers, small businesses, and other vulnerable segments of the economy. As the Team Thailand delegation—led by Finance Minister Pichai Chunhavajira—prepares for a pivotal meeting with the Office of the United States Trade Representative (USTR) later this week, Mr. Paopoom reiterated a core principle: the objective is to secure a fair, sustainable outcome that preserves Thailand’s economic resilience while pursuing meaningful market access. The message is clear: negotiations are not about the lowest tariff alone but about achieving a well-rounded, balanced outcome that benefits the broader economy over time.
Balanced Outcomes in Trade Talks
In the current round of negotiations, Thailand is pursuing a pragmatic path that recognizes the benefits of deeper trade ties with the United States while acknowledging the domestic costs that could accompany aggressive tariff reductions. Paopoom described the essence of the Thai negotiating stance as a commitment to achieve a balanced outcome—one that safeguards Thai exporters’ interests without exposing local producers, including farmers and small businesses, to destabilizing competitive pressures. He emphasized that the ultimate “winner” in any trade deal is not the party that secures the lowest tariff, but the party that forges a package of terms that preserves economic stability and broad-based prosperity. The deputy minister highlighted that the government is actively working to secure more favorable terms for Thai exports, given that the current reciprocal tariff rates on Thailand’s shipments to the United States average around 36 percent. Ongoing talks are aimed at negotiating adjustments that could improve market access, reduce friction in trade channels, and enhance predictability for Thai firms.
Yet, Paopoom warned that any concessions on U.S. tariff reductions would likely come with expectations in return—namely, increased access for U.S. products and services into Thai markets. He argued that such reciprocal benefits must be weighed against the potential impact on Thai domestic industries, noting that the Thai economy cannot be treated as an export-focused enclave in which price-based concessions are unconditionally extended. The deputy minister underscored that Thailand’s strategy is not simply to chase lower tariffs but to optimize the balance between export competitiveness and the protection of domestic sectors that form the backbone of the country’s economic and social fabric. The emphasis on a balanced outcome reflects a broader understanding that tariff policy is a macroeconomic instrument with distributional consequences, and that policy design must account for the diverse interests of farmers, small and medium-sized enterprises (SMEs), and livestock producers alongside large-scale manufacturers and exporters.
In articulating the philosophy behind the balanced-outcome framework, Paopoom explained that the government is pursuing targeted tariff reforms rather than blanket reductions. He noted that any tariff concessions would be conditional on achieving corresponding improvements in market access, which would require concessions from the United States that align with Thailand’s strategic interests. This approach seeks to avoid a scenario in which Thailand exposes its domestic market to heightened competition in ways that could destabilize essential supply chains or erode the competitiveness of vulnerable sectors. The deputy finance minister also pointed to the importance of maintaining price stability and ensuring that Thai households do not bear disproportionate costs as a consequence of a rapid or unilateral liberalization in one direction. His remarks convey a disciplined approach to trade liberalization—one that prioritizes long-term productivity gains, sectoral diversification, and social equity within the Thai economy.
In recognizing the breadth of economic activity that could be affected, Paopoom outlined a broad range of considerations guiding the Thai stance. These include the need to protect core domestic industries that contribute substantially to employment, regional development, and food security, as well as to preserve the ability of local producers to participate meaningfully in global value chains. He stressed that the government must weigh not only immediate tariff savings but also the broader consequences for supply chains, input costs, and the availability of critical goods within the domestic market. The emphasis on a holistic assessment reflects a recognition that trade agreements can reshape industrial structure, affect regional disparities, and influence the competitiveness of high-value sectors over the long run. The balanced-outcome concept thus emerges as a comprehensive framework for evaluating offers and counteroffers, assessing countervailing measures, and calibrating market-access commitments against domestic capacity to absorb and adapt to increased competition.
As talks unfold, Thailand remains alert to the risk that over-concessions could trigger unintended consequences. Paopoom pointed to the risk that reducing U.S. tariffs excessively would simultaneously raise expectations for broader market access in other sectors, potentially leading to faster-than-expected inflows of foreign goods that could crowd out local producers. He argued that protecting the domestic productive base—ranging from agriculture to small-scale manufacturing and livestock sectors—requires careful phasing of tariff reductions, as well as the deployment of complementary policy instruments. In this sense, the balanced outcome is not merely about tariff levels, but about designing a multi-faceted package that includes safeguards, transitional measures, and targeted support for sectors most vulnerable to import competition. The deputy minister’s remarks reflect a sophisticated, macroeconomic view of trade liberalization—one that recognizes that competitive advantages are built not solely on tariff levels, but on the overall quality and resilience of domestic industries and the ecosystems that support them.
At a practical level, the government is seeking to translate the balanced-outcome principle into concrete negotiating items. Among the expected areas of focus are reciprocal market-access terms for a broad set of goods and services, provisions that safeguard sensitive sectors, and rules that help Thai producers maintain competitiveness without sacrificing consumer welfare. Paopoom’s comments imply a willingness to engage in a calibrated, stepwise process rather than a sudden, sweeping reform. In particular, the Thai side appears intent on maintaining flexibility to protect strategic industries and to adjust policy tools in response to evolving market conditions, including macroeconomic variables such as exchange rates, inflation, and domestic demand. The overarching goal is to craft a framework that yields sustainable gains in export opportunities while preserving the structural integrity of key sectors that underpin rural livelihoods, regional development, and long-term economic stability.
In sum, the balanced-outcome approach articulated by Paopoom Rojanasakul signals a deliberate strategy designed to govern the pace and scope of tariff liberalization in the Thai-US context. The aim is to secure meaningful concessions that expand access for Thai products while mitigating adverse consequences for domestic industries and workers. The emphasis on balance—between exporters’ gains and the protection of local producers, including farmers and SMEs—reflects a broad-based development perspective. As the Team Thailand delegation approaches its talks with the USTR, the government’s stance embodies careful calibration, risk awareness, and a commitment to ensuring that any tariff-related gains contribute to a more inclusive, resilient Thai economy over time.
Tariff Structures and Strategic Considerations
Thailand’s current negotiations revolve around a complex calculus of tariff structures, market access, and the interplay between liberalization and domestic protection. The deputy finance minister’s remarks indicate that the starting point for any substantive revision of tariff arrangements is anchored in a baseline of reciprocal rates that reflect the existing bilateral framework. The fact that Thailand’s exports to the United States currently face an average reciprocal tariff of about 36 percent underscores the size of the potential gains that could be realized through more favorable terms. However, Paopoom’s cautions about the conditionalities often embedded in tariff negotiations illuminate the central tension in this process: the need to secure meaningful market access without triggering disproportionate harm to Thai industries that underpin employment and supply chains nationwide.
One critical dimension of the discussion is whether a zero-tariff regime—a complete elimination of duties on all US goods—exists as a viable option for Thailand within this negotiating framework. Paopoom explicitly rejected the notion of a blanket zero-tariff arrangement, arguing that such an approach would require full market access for U.S. goods and would likely overwhelm domestic industries in a way that could undermine supply chains and price stability. He indicated that the government cannot simply adopt a Vietnam-style zero-tariff policy across the board, because the structural conditions and strategic priorities of Thailand differ in meaningful ways from those of Vietnam. The implication is that a nuanced, tiered approach to tariff reductions is more appropriate for Thailand’s current economic architecture—one that recognizes the domestic sector’s capacity to absorb competition while leveraging gains in export competitiveness.
In this context, the Thai government is evaluating the merit of targeted tariff reductions that would align with broader policy objectives, including rural development, food security, and the long-term diversification of the economy. The aim is to identify sectors where tariff concessions would yield high marginal gains in export potential without precipitating large-scale dislocations in the Thai economy. The focus on targeted reductions also implies a preference for reciprocal, performance-based commitments rather than unconditioned access for foreign goods. For example, the government may seek to secure better access in exchange for commitments from the United States to open its own markets to Thai products that have the potential to penetrate U.S. supply chains or to contribute to U.S. food and manufacturing sectors. Such a reciprocal logic would aim to maintain balance in the overall bargain, ensuring that concessions are matched by corresponding benefits that align with Thailand’s strategic needs.
Another key consideration in the tariff structure discussion is the degree to which strategic products should be excluded from any zero-tariff commitments. Paopoom pointed out that certain products are essential to national interests—whether due to security concerns, domestic stability, critical supply chains, or the protection of livelihoods in rural areas—that would argue against exposing them to unlimited competition from imported goods. This line of thinking reflects a prioritization of resilience and self-sufficiency as pillars of economic policy. It acknowledges that a reduction in tariffs on certain categories of goods could have outsized consequences for price levels, input costs, and the reliability of domestic supply. In practice, excluding strategic goods implies creating carve-outs or phased entry mechanisms that preserve the capacity of domestic producers to adjust to freer trade without incurring abrupt losses of market share or income.
In parallel, Paopoom’s remarks on the relative strength of the export sector as a driver of GDP are not meant to downplay the importance of the domestic economy. He emphasized that maintaining a robust domestic market—supported by farmers, SMEs, and livestock producers—is essential to the country’s long-term stability. The logic here is that a successful trade policy must support the entire economic ecosystem: exporters require competitive inputs and efficient logistics; farmers and SMEs require access to fair competition and price signals that reflect real costs and risks; and the broader society benefits from sustainable jobs and inclusive growth. The argument, therefore, is that tariff liberalization must be calibrated to protect the delicate balance among these components, especially in a developing economy where rural livelihoods remain a cornerstone of social stability. The tariff-structure debate thus unfolds as a multi-layered negotiation about which goods will be subject to reductions, under what conditions, and with what collateral measures designed to safeguard strategic sectors.
The structural comparison with other economies adds additional nuance to the tariff considerations. In particular, Paopoom referenced the case of Vietnam to illustrate how tariff policy can be contingent on the sophistication of supply chains, the degree of regional value content, and the maturity of industrial ecosystems. Vietnam’s tariff regime under certain U.S. trade policy arrangements includes a two-tier system: goods that meet regional value content (RVC) requirements can face a 20 percent tariff, while goods that do not meet those requirements face a higher 40 percent tariff. The implication is that value-chain integration and domestic capability play a central role in determining the effective cost of imported inputs and, by extension, the attractiveness of liberalization pathways. By pointing to Vietnam’s approach, Paopoom suggests that a more nuanced framework—one that rewards domestic providers for improving value-added content and supply-chain sophistication—could gradually uplift Thai industries while protecting domestic interests in the short term.
The rationale behind rejecting a blanket zero-tariff strategy also rests on the recognition that Thailand’s export trajectory must be balanced with the development priorities of its domestic economy. The government acknowledges that while export-oriented growth can be a powerful engine of GDP expansion and employment, it must not come at the expense of the very communities that form the rural bedrock of the country’s economy. Paopoom’s articulation of the need to “weigh benefits against potential harms” underscores the necessity of applying a prudent, evidence-based approach to tariff policy. The proposed framework would aim to optimize the combination of tariff reductions, market-access concessions, and policy instruments designed to bolster domestic competitiveness, efficiency, and resilience. In this sense, the tariff-structure debate becomes a test case for how Thailand can reconcile outward-looking growth with inward-looking protections that preserve social welfare and the stability of critical sectors.
As negotiations proceed, the broader regional context heightens the importance of a carefully calibrated tariff strategy. Thailand’s government must consider not only bilateral constraints and opportunities with the United States but also how any policy moves will interact with regional dynamics, including competition from neighboring economies in Southeast Asia. By maintaining a differentiated approach to tariff reductions, the Thai authorities seek to avoid triggering unintended consequences that could undermine domestic manufacturing capabilities, disrupt local supply chains, or erode the cost competitiveness of Thai producers in key industries. The nuanced tariff framework, therefore, functions as a risk-managed path toward deeper economic integration, ensuring that gains from liberalization are achieved in a way that reinforces internal economic strength and resilience.
In summary, the tariff-structure discourse within the Thai-US negotiations is characterized by a careful tension between openness and protection, between immediate tariff reductions and longer-term industry development, and between reciprocal commitments and domestic safeguards. The emphasis on strategic sectors, sector-specific carve-outs, and value-chain considerations reflects a sophisticated understanding that tariff policy is not a simple binary choice between complete openness and complete protection. Rather, it is a complex instrument that shapes the direction of industrial transformation, the quality of domestic competition, and the social and economic well-being of a broad spectrum of Thai citizens. As the negotiations advance, Thailand’s stance remains anchored in achieving a balanced, sustainable, and forward-looking set of terms that can support inclusive growth while expanding Thai competitiveness on the global stage.
Domestic Sector Impacts and Zero-Tariff Debate
The Thai government’s cautious stance toward broad zero-tariff commitments is rooted in a deep concern for how rapid liberalization could disrupt domestic markets and undermine livelihoods across multiple sectors. Deputy Finance Minister Paopoom Rojanasakul has stressed that, while broader access to the U.S. market is a desirable outcome, it cannot come at the expense of the well-being of farmers, SMEs, and domestic livestock producers. His remarks underscore a core premise: policy recommendations in trade negotiations must be evaluated through the lens of social equity and economic resilience. This is not a call to halt modernization or to reject market-based reforms; rather, it is a disciplined approach to ensure that structural adjustments are manageable and that the gains from trading arrangements are broadly shared.
A central concern is the potential crowding-out effect that could arise if Thai markets are flooded with cheaper, higher-quality imported goods. Such a dynamic could compress margins for domestic producers, reduce household purchasing power, and threaten employment in rural and small-town areas where livelihoods depend on agriculture, livestock, and ancillary industries. Paopoom’s caution is consistent with a broader policy philosophy that recognizes the heterogeneity of the Thai economy: some sectors are highly adaptable to competition and can benefit from exposure to more intense international competition, while others are more fragile and require a longer runway to adapt, modernize, or scale up capabilities. The government’s approach, therefore, emphasizes phased liberalization, targeted tariff reductions, and preemptive safeguards that contain risk while enabling progress toward greater export competitiveness.
The protection of farmers and SMEs is a recurring theme in the narrative around trade liberalization. Farmers, in particular, are exposed to volatile input costs and price fluctuations in global markets, and small businesses often operate with tighter margins and less financial slack to absorb shocks. The Thai administration argues that a blanket removal of tariffs could destabilize these actors by eroding their price competitiveness and undermining the financial viability of small-scale producers who rely on predictable profit margins. Moreover, the domestic animal husbandry sector—an important component of rural livelihoods—could face increased exposure to imports that disrupt established supply chains and alter the economics of local production. In light of these concerns, policymakers advocate for a measured approach to tariff reductions that protects the most vulnerable segments of the economy while still advancing the country’s broader trade objectives.
An essential element of the domestic-sector protection strategy is the identification and exclusion of strategic products from zero-tariff commitments. The government has signaled that certain products—deemed critical to national interests—would be shielded from aggressive tariff dismantling. The rationale is straightforward: allowing unrestricted foreign competition for these products could introduce supply-chain vulnerabilities, reduce bargaining power with foreign suppliers, or erode the domestic capability to respond to emergencies. Strategic products might include essential foodstuffs, inputs critical to manufacturing, medical supplies, and other goods whose availability directly affects public welfare and economic security. By delineating these categories, Thailand aims to preserve a buffer that maintains domestic readiness and resilience even as tariff concessions are pursued in other non-strategic sectors.
The discussion around zero-tariff commitments also reflects concerns about the pace of change and the need for a transitional framework. Rather than a sudden, comprehensive termination of tariffs across all goods, a staged approach could provide valuable time for domestic producers to adjust to new competitive realities. Transitional arrangements might include temporary safeguards, tariff-rate quotas (TRQs), or performance-based access triggers. Under such schemes, concessions are gradually phased in as domestic firms improve productivity, invest in modernization, and expand capacity to meet rising demand. This thoughtful sequencing is designed to minimize dislocation while maximizing the upside of a more open trade regime.
In seeking to protect the domestic economy, Thailand also contends that the government must ensure that tariff liberalization is complemented by other policy instruments that reinforce competitiveness. These could include measures to promote innovation, knowledge transfer, and productivity enhancements in key industries; targeted support for smallholders to upgrade farming practices, diversify crops, and improve value addition; and investment in infrastructure, logistics, and digitalization to reduce costs and improve efficiency across supply chains. The goal is to create an ecosystem in which liberalization translates into real, sustained gains rather than temporary price reductions that erode domestic resilience. The policy package would be designed to stimulate investment, preserve livelihoods, and catalyze structural transformation in a way that aligns with Thailand’s broader development objectives.
Within the broader domestic context, concerns about price stability and consumer welfare also figure prominently in the zero-tariff debate. Lower tariffs can lower import costs for some consumer goods, but the net consumer impact depends on how tariff reductions interact with exchange-rate movements, domestic inflation, and the price elasticity of demand. If tariffs are aggressively reduced without adequate safeguards or offsetting measures, consumers could benefit from lower prices in the short term, but this could be offset by higher costs in other sectors if domestic producers reduce production or exit the market. The government recognizes the importance of maintaining price stability and ensuring that changes in tariff policy do not destabilize households, particularly those with lower incomes who spend a larger share of their budgets on essential goods. This concern reinforces the preference for a measured, evidence-based approach to tariff liberalization that preserves affordability while enhancing competitiveness.
The discussion around how to balance the tariff reduction agenda with social welfare also intersects with the political economy of Thailand. Various stakeholders—ranging from farm associations to manufacturing lobby groups and consumer organizations—will have strong views on how quickly and by how much tariffs should be adjusted. Policymakers must navigate these competing interests, manage expectations, and maintain a credible commitment to gradual reform. Transparent policymaking, robust impact assessments, and clear communication about the expected costs and benefits of different policy options will be essential to sustaining public confidence in the negotiations. In this sense, the domestic debate about zero-tariff commitments is not merely a technical negotiating issue; it is a crucible for how Thailand balances growth with inclusion, how it safeguards livelihoods while embracing modernization, and how it positions itself to capitalize on the expanding opportunities of global trade.
As the negotiation landscape evolves, officials acknowledge that the ultimate outcomes will depend on a combination of tariff terms, market-access commitments, and the sequencing of reforms. The domestic policy architecture will need to be adaptable, able to respond to evolving U.S. offers and to changes in the global economic environment. In particular, Thailand is mindful of the possibility of retaliatory measures or shifting economic conditions that could influence both sides’ willingness to commit to deeper liberalization. The government’s contingency planning emphasizes scenario-based analysis, including potential variations in tariff levels and the corresponding implications for GDP growth, trade balances, and sectoral performance. This forward-looking stance aims to ensure that, regardless of which path the negotiations take, Thailand can manage the transition smoothly, protect vulnerable sectors, and realize lasting improvements in competitiveness.
The domestic sector emphasis also involves close coordination across ministries and agencies responsible for trade, agriculture, industry, finance, and regional development. Consistency across policy domains is essential to ensure that tariff decisions align with broader development objectives, such as rural uplift, food security, and SME competitiveness. Interagency collaboration can help translate tariff concessions into tangible domestic benefits, whether through investment incentives, modernization programs, export-support services, or targeted safety nets during periods of price adjustment. The government’s approach in this area reflects an integrated, cross-cutting strategy designed to maximize the chance that any future tariff liberalization translates into durable, inclusive economic gains.
In short, the domestic-sector impacts and zero-tariff debate illustrate the delicate balancing act at the heart of Thailand’s trade policy. The government seeks to expand export opportunities and deepen economic integration with the United States while preserving the capacity of farmers, SMEs, and other vulnerable groups to adapt and prosper. This balance requires careful design of tariff reductions, strategic exclusions, transitional measures, and complementary domestic policies that sustain productivity, improve competitiveness, and maintain social stability. The path forward will require ongoing assessment, disciplined decision-making, and steady stakeholder engagement to ensure that tariff liberalization advances Thai interests in a way that is equitable and sustainable for years to come.
Vietnam Comparisons and Regional Dynamics
A central element of the Thai policy discussion involves drawing careful lessons from regional peers, particularly Vietnam, to understand how tariff liberalization interacts with supply-chain development and regional competition. Paopoom explained that Vietnam’s tariff framework under U.S. trade policy entails two distinct rates: a lower 20 percent tariff for goods that are produced with domestic or regional inputs and meet Regional Value Content (RVC) criteria, and a higher 40 percent tariff for goods that do not meet those criteria. He argued that Vietnam’s supply chain is not as developed as Thailand’s, which leads to a relatively larger share of Vietnamese exports potentially facing the higher 40 percent tariff. This comparative assessment highlights how the design and maturity of a country’s industrial ecosystem influence the behavioral responses of firms to tariff liberalization. In short, a country with a more integrated, advanced supply chain and higher domestic value-added capabilities may be better positioned to realize the full benefits of more aggressive tariff reductions with fewer negative spillovers.
The Vietnam comparison reinforces the Thai view that blanket zero-tariff commitments are not a one-size-fits-all solution. Because the two economies differ in their production structures, value-chain integration, and domestic capacity to absorb competition, the same policy levers can yield different outcomes. Paopoom’s argument suggests that Thailand should tailor tariff liberalization to its own development stage and strategic priorities, rather than adopt a copy-paste approach from neighboring economies. This stance is consistent with the broader objective to preserve domestic industrial capacity and ensure that policy reforms contribute to long-term competitiveness rather than short-term price downshifts that destabilize sectors with thinner margins or limited flexibility.
The Vietnam contrast also underscores the importance of regional dynamics in shaping Thailand’s choices. As Southeast Asia relies increasingly on supply chains that span multiple countries, harmonization of rules and efficient regional collaboration become critical components of negotiating strategy. The Thai authorities want to ensure that any concessions granted in the U.S. context do not inadvertently undermine regional competitiveness or produce leakage effects that shift production to neighboring markets where costs are lower or policy incentives are more favorable. Therefore, the regional perspective informs the Thai stance on how far, how fast, and under what conditions tariff reductions should proceed. The aim is to preserve Thai competitiveness while leveraging opportunities to enhance regional supply chains, innovate, and attract investment that strengthens the country’s export platform.
Beyond the supply-chain nuances, the Vietnam example illuminates how different policy instruments can complement tariff liberalization. For instance, the two-tier tariff regime in Vietnam suggests that policymakers can design incentives that reward higher-value content and domestic sourcing. In Thailand’s case, the question becomes how to structure such incentives to encourage Thai firms to upgrade their technologies, adopt higher-quality inputs, and increase domestic value-added. The potential for performance-based rules, sector-specific access commitments, and dynamic tariff adjustments could be explored to ensure that liberalization translates into tangible productivity gains rather than merely lower import prices. The Vietnam comparison thus serves as a valuable frame for thinking about how to calibrate Thai concessions in a way that aligns with domestic development priorities and regional competition.
The regional context also includes the sentiment among Thai policy-makers that the country possesses a relatively stronger export-oriented base and a more mature manufacturing sector in comparison with some regional peers. This relative strength provides Bangkok with greater room to negotiate. It allows Thai negotiators to push for terms that reflect Thailand’s capacity to absorb changes in market access without compromising domestic supply chains. At the same time, it underscores the need for prudence in selecting which sectors receive deeper liberalization and how to implement it—especially in areas where Thai suppliers compete with specialized imports in a market that is highly price-sensitive or where local inputs are critical to the functioning of domestic industries. The regional dynamics thus reinforce the sense that a carefully calibrated approach to tariff reform, grounded in sectoral realities and supply-chain maturity, is essential for ensuring that Thailand remains competitive within Southeast Asia while expanding its reach in the United States.
In sum, the Vietnam comparisons and regional dynamics provide important dimensions for interpreting Thailand’s negotiating posture. The two-tier approach observed in Vietnam demonstrates how tariff rules can incentivize domestic value addition, maintain supply-chain resilience, and support strategic industries. Paopoom’s emphasis on these dynamics indicates a broader understanding that tariff liberalization cannot be pursued in isolation from the development of domestic ecosystems and regional competitiveness. Thailand’s strategy—centered on balance, safeguards, and selective concessions—reflects an intention to learn from regional experiences while preserving the autonomy to tailor policy choices to the needs of Thai workers, farmers, SME owners, and other stakeholders. As talks progress, this regional lens will continue to shape Thailand’s approach to tariff reductions, market access commitments, and the overarching objective of achieving sustainable growth that benefits all segments of Thai society.
Policy Planning, Contingency Measures, and Tariff Scenarios
A critical element of Thailand’s approach to the US trade talks is the emphasis on preparedness, scenario planning, and contingency measures designed to shield the domestic economy from adverse outcomes that could accompany tariff liberalization. Commerce Minister Jatuporn Buruspat has publicly indicated that Thailand has moved forward with proposals aimed at reducing import tariffs on a broad swath of US products, including tens of thousands of items, to zero. This assertion signals an aggressive negotiating posture aimed at maximizing potential upside in export opportunities and market access. The government has also lodged additional proposals, signaling a robust, ongoing effort to broaden the scope of potential concessions and to place pressure on the USTR to consider a wide array of products for zero-tariff treatment. The scope and ambition of these proposals reflect a strategic calculation that a more expansive tariff liberalization could yield greater diversification of export markets, strengthen the country’s position in global value chains, and reduce the overall trade deficit.
In parallel, Thai policymakers have emphasized the importance of drafting contingency plans to guard against retaliatory tariffs or other punitive measures that could be imposed by the United States in response to tariff concessions. The guidance issued to relevant agencies underscores two potential tariff-path scenarios that would shape the country’s economic responses. In one scenario, Thai goods may face a 36 percent tariff rate under certain terms; in another scenario, Thai products could be subjected to a 20 percent tariff, aligning with a level that is present in Vietnam’s framework. The articulation of these two scenarios demonstrates a cautious, risk-aware approach to policy architecture. It also reflects a willingness to consider alternative pathways in the event that negotiations do not produce the desired outcomes, ensuring that the government is prepared to implement countermeasures, adjust domestic incentives, or recalibrate supply chains to mitigate negative impacts.
The contingency planning process is not limited to tariff levels alone. It also encompasses industry-specific analysis, supply-chain disruption risk assessments, and the identification of sectors that may require transitional support as liberalization proceeds. For example, if the U.S. offers broad tariff reductions in some areas but not others, policymakers may need to implement a combination of safeguards, price stabilization measures, and targeted subsidies or incentives to assist domestic producers during the adjustment period. This integrated approach aims to minimize volatility, preserve employment, and maintain access to essential goods for Thai consumers. The government’s contingency measures reflect a recognition that trade policy is inherently dynamic, influenced by external shocks, shifts in global demand, and evolving geostrategic considerations. Consequently, the policy framework is designed to be adaptive, data-driven, and capable of absorbing shocks without undermining macroeconomic stability.
The two tariff-path scenarios—36 percent and 20 percent—offer a framework for assessing the likely macroeconomic implications of different liberalization outcomes. Under a 36 percent tariff regime, the immediate impact on import costs would be more moderate, and the domestic market could experience a slower pace of price adjustments but with ongoing protection for certain sectors. This scenario could support gradual productivity improvements in domestic industries while reducing the risk of abrupt price shocks to consumers and suppliers. Conversely, a 20 percent tariff regime would represent a more aggressive liberalization path and, if fully realized, could drive more rapid shifts in comparative advantage, accelerate the expansion of export opportunities, and potentially compress domestic margins in sectors facing intensified competition. However, such a scenario could also place greater stress on vulnerable segments of the economy if complementary policies are not implemented to cushion workers and small businesses during the adjustment process.
A key objective of contingency planning is to ensure that the Thai government can respond promptly to any countervailing measures, safeguard domestic supply chains, and protect strategic sectors from excessive exposure to foreign competition. This includes analyzing potential tariff-rate quota arrangements, domestic subsidies or incentives for upgrading technology and productivity, and investment in infrastructure to reduce production and logistics costs. The broader aim is to maintain the resilience of the Thai economy in the face of trade-policy shifts, ensuring that liberalization translates into tangible benefits for the majority of the population rather than a narrow set of export-oriented firms. The planning process also involves coordinated communication with stakeholders to manage expectations and to provide clarity about the policy pathways being pursued, the rationale behind them, and the expected timelines for implementation. A transparent, evidence-based approach helps build public trust and reduces the risk of market disruptions stemming from uncertainty.
In addition to macroeconomic concerns, contingency measures must consider regional and sectoral diversity. For instance, agricultural producers, particularly smallholders who rely on stable input costs and predictable market access, may require targeted support and transition assistance as tariffs are adjusted. Similarly, the domestic manufacturing sector may benefit from targeted incentives to upgrade technology, adopt advanced manufacturing practices, and integrate into higher-value segments of global supply chains. By recognizing sector-specific needs and aligning policy instruments with the realities of different industries, the government can mitigate adverse effects while maximizing the potential upside of deeper trade ties with the United States.
The policy-planning framework also contemplates the long-term structural implications of tariff liberalization. A measured approach to tariff reductions—paired with investments in competitiveness and innovation—could catalyze a shift in Thailand’s industrial composition toward higher value-added activities and more sophisticated domestic supply chains. This could contribute to sustained productivity growth, more resilient GDP trajectories, and a broader distribution of gains across urban and rural areas. The plan is to avoid a single-minded focus on tariff cuts; instead, it emphasizes the creation of an enabling environment in which Thai firms can upgrade capabilities, expand into new markets, and benefit from enhanced access to the U.S. market in a manner that does not undermine domestic stability or social welfare.
As negotiations unfold, the government’s contingency planning will remain a critical governance tool. It provides a structured way to evaluate the potential consequences of various tariff outcomes, weigh policy trade-offs, and implement corrective measures as needed. The readiness to deploy a wide spectrum of responses—from tariff adjustments and safeguard mechanisms to targeted investments and workforce development programs—reflects a mature, risk-managed approach to international trade policy. In this light, Thailand’s negotiating posture is characterized by strategic foresight, cross-ministerial coordination, and a commitment to safeguarding domestic livelihoods while pursuing deeper integration with the United States.
Industry Voices, Business Community Perspectives, and Public Sentiment
Industry voices play a pivotal role in shaping Thailand’s approach to tariff liberalization, offering practical perspectives on how policy changes might affect real-world operations, pricing, and competitiveness. Within this ecosystem, the Thai Chamber of Commerce, and its leadership, have been vocal about the country’s trade ambitions and the potential benefits and risks associated with deeper integration with the United States. Chanitra Chalisarapong, vice chairman of the Thai Chamber of Commerce, has been cited in discussions related to the policy direction, signaling an industry push toward more ambitious tariff reductions. He indicated that Thailand plans to remove tariffs on a significantly larger share of U.S. goods—up to 90 percent, up from around 60 percent previously—by presenting the plan to Washington. He also flagged a potential impact on Thailand’s trade balance, noting that a substantial expansion of zero-tariff coverage could alter the country’s trade surplus in the medium term.
From the industry perspective, the prospect of broader zero-tariff coverage is described as a signal of confidence in Thailand’s ability to manage the associated risks while capitalizing on the opportunities presented by U.S. market access. The Chamber’s position underscores the belief that widening zero-tariff coverage could spur investment, drive demand for Thai products, and strengthen the country’s attractiveness as a manufacturing base and export platform. Yet, it also raises concerns about potential disruptions to domestic markets and the need for robust measures to support sectors most exposed to import competition. The Chamber’s public statements reflect a balanced view: while embracing the prospects of greater market access, the industry seeks assurances that the transition will be managed in a way that preserves business viability, protects livelihoods, and ensures that the uplift is evenly distributed across sectors.
Businesses across the spectrum—ranging from agriculture and agribusiness to consumer goods producers and industrial manufacturers—are closely watching how tariff concessions unfold. For exporters, lower tariffs on U.S. inputs or finished goods could streamline cross-border sales and reduce production costs, enhancing competitiveness in the American market. For domestic producers, particularly small and medium-sized firms, the key concerns are how price pressures, input costs, and competition from imported goods might change, and how any policy adjustments might be complemented by targeted support to upgrade productivity and improve quality. Industry associations are likely to advocate for a transparent transition, with clear criteria for tariff reductions, schedules for implementation, and measurable milestones that demonstrate tangible benefits to Thai workers and firms.
Consumer groups and civil society organizations may offer a more nuanced set of critiques and questions about tariff liberalization. They might emphasize the potential impacts on price levels, inflation, and the affordability of essential goods. They could advocate for robust safeguards to shield consumers from price volatility, while ensuring that the gains from greater competition do not come at the expense of vulnerable households. Public sentiment typically weighs these considerations, balancing the desire for lower consumer prices with concerns about job security, wage growth, and the equitable distribution of benefits across income groups. The government’s communication strategy will need to address these concerns by providing accessible explanations of how tariff reforms will unfold, how vulnerable segments will be protected, and how long it will take for the benefits to materialize in real terms.
Taken together, industry voices and public sentiment contribute to a broader understanding of the trade-offs involved in tariff liberalization. The Thai government’s approach seeks to mobilize support from business communities while ensuring that policy choices remain grounded in social equity and economic resilience. The push for broader zero-tariff coverage signals confidence in Thailand’s capacity to manage the transition and to safeguard domestic interests through complementary measures, safeguards, and strategic sector protections. Yet the government remains mindful of the necessity to maintain public trust by ensuring transparent processes, clear timelines, and robust impact assessments that can guide decisions as the negotiations continue.
In any negotiation process, the perspectives of the business community are fundamentally important because they translate policy discourse into actionable implications for firms and workers. The government’s challenge is to translate the potential gains from expanded U.S. market access into concrete outcomes—such as higher export volumes, improved productivity, and job creation—while managing transitional risks for sectors that are more vulnerable to import competition. Achieving this balance requires ongoing dialogue with industry groups, proactive policy design to support domestic competitiveness, and careful monitoring of sectoral performance as tariff terms evolve. The convergence of policy objectives, industry insights, and public sentiment thus plays a central role in shaping the trajectory of Thailand’s trade liberalization journey, helping to align negotiation goals with the practical realities of the Thai economy and its people.
Forward-Looking Scenarios, Economic Implications, and Strategic Takeaways
As trade talks progress, policymakers and analysts are focused on the long-term economic implications of the proposed tariff adjustments and the broader policy framework that will accompany liberalization. The central question is how to reconcile a more open trading regime with the need to preserve domestic economic stability, promote inclusive growth, and foster resilience in the face of external shocks. The two primary tariff-path scenarios—retaining a 36 percent tariff rate or moving toward a 20 percent rate—offer distinct trajectories for the Thai economy, each with its own set of potential benefits and risks. An important takeaway is that any adverse effects can be mitigated through a combination of supportive policies, targeted investments, and careful sequencing of reforms that allow sectors to adapt gradually to new competitive conditions.
Under a 36 percent tariff pathway, the import-cost pressures on Thai producers would be less intense, potentially reducing the immediate risk of price volatility for consumers and stabilizing certain sectors that might otherwise face significant disruption from sharper liberalization. This approach could provide a smoother transition for domestic industries that require more time to restructure, upgrade technology, and improve productivity. However, maintaining higher tariffs for longer could slow the realization of deeper market access benefits and limit the speed at which Thai exporters can capitalize on the U.S. market. It could also reduce incentives for domestic firms to upgrade, innovate, and integrate further into regional and global value chains if the perception is that protection remains a default option.
The alternative 20 percent tariff pathway represents a more aggressive liberalization scenario. If realized, such an approach could catalyze more rapid improvements in competitive pressure, prompting firms to accelerate modernization, adopt higher-value processes, and deepen integration into regional and global supply chains. The potential upside includes greater export growth, enhanced efficiency, and broader diversification of the Thai economy. On the flip side, a rapid liberalization path could heighten short-run vulnerabilities for farmers, SMEs, and other domestic producers who must absorb intensified competition, adjust their product offerings, or expand into new market niches. The success of this pathway would hinge on the government’s ability to deliver timely, effective support measures—such as financing for modernization, training programs, supply-chain infrastructure investments, and responsive safety nets—to cushion the transition and sustain employment.
The two scenarios also have implications for macroeconomic stability, the trade balance, and the pace of structural transformation. A faster liberalization path could improve Thailand’s trade balance by expanding export volumes and diversifying the country’s clientele, particularly if the U.S. and other markets respond positively to Thai offerings in high-value sectors such as manufacturing, agriculture-based processed products, and specialized services. However, if imports rise more rapidly due to cheaper foreign goods, there could be upward pressure on the trade deficit in the short run, necessitating countervailing policy measures, currency management considerations, and prudent fiscal policy. Conversely, a slower liberalization trajectory might support domestic stability but could yield damping effects on investment and long-term productivity gains if domestic firms fail to intensify their modernization efforts in response to more open competition.
From a sectoral perspective, a more expansive zero-tariff framework in the United States could offer opportunities for Thai industries that are well-positioned to supply U.S. demand for consumer goods, machinery, agriculture inputs, and other products. But to translate these opportunities into durable gains, the sectors must have robust competitiveness, efficient supply chains, and the capacity to meet U.S. regulatory standards. By contrast, sectors that rely on specialized inputs or that are heavily dependent on domestic agriculture may require targeted support to ensure they can adapt to greater import exposure without compromising food security or price stability. The challenge for policymakers is to design a policy package that aligns per-sector incentives with overall national development goals, fostering innovation, productivity gains, and inclusive growth across the economy.
A key policy takeaway is the critical role of safeguards, safeguards, and transition mechanisms. The government’s contingency planning signals a commitment to deploying a mix of policy tools that can help cushion any adverse impact on households and producers. These tools could include temporary tariff-rate quotas, targeted subsidies or tax incentives for investment in modern equipment and digital technologies, private-sector financing facilitation, and public-private partnerships to upgrade infrastructure, logistics, and human capital. The overall aim is to ensure that liberalization does not come at the expense of social welfare or the resilience of essential sectors. In this sense, the policy approach to tariff liberalization is not simply about reducing duties but about constructing an ecosystem that supports sustainable, inclusive economic growth.
Beyond the immediate economic considerations, the evolving tariff policy is also about Thailand’s longer-term strategic positioning. The country seeks to maintain its status as a reliable, diversified production base capable of integrating into global value chains in high-value sectors. This involves investments in human capital, R&D, digital transformation, and the modernization of agricultural practices to improve yields, quality, and value addition. By strengthening domestic capabilities, Thailand can enhance its bargaining power in international talks and secure more favorable terms across various trade channels, not only with the United States. The strategic objective is thus to use tariff reform as a lever for broader structural transformation—an instrument to accelerate modernization while preserving social stability and ensuring that gains are widely distributed.
In conclusion, the forward-looking implications of Thailand’s tariff liberalization strategy point toward a deliberate, measured path that seeks to maximize benefits while minimizing risks. The government’s contingency planning, scenario analysis, and emphasis on safeguarding domestic sectors reflect a mature, nuanced approach to trade policy. The two tariff-path scenarios—36 percent and 20 percent—offer flexibility to adapt to evolving negotiations and market conditions, with the ultimate objective of achieving a balanced, sustainable outcome that strengthens Thailand’s economic resilience and broad-based growth. As negotiations intensify, the insights of policymakers, the perspectives of industry and business communities, and the needs of consumers will continue to shape the design and implementation of tariff reforms, guiding Thailand toward a future of greater trade integration and domestic prosperity.
Conclusion
Thailand’s negotiations with the United States are framed by a clear, deliberate preference for a balanced outcome that protects the domestic economy while expanding market access. Deputy Finance Minister Paopoom Rojanasakul has underscored that zero-tariff commitments across all US goods are not on the table, citing potential risks to local industries, farmers, and SMEs. The Thai approach emphasizes targeted concessions, strategic exclusions, and a sequencing of reforms designed to minimize disruption while maximizing long-term growth. The government’s stance draws on a nuanced understanding of tariff policy as a tool for structural transformation rather than a one-dimensional price reduction mechanism. The comparisons with Vietnam offer additional context about how different supply-chain maturities shape tariff design and the potential benefits of rewarding domestic value addition through tiered or conditional liberalization.
As talks advance, contingency planning and scenario analysis will play a crucial role in shaping policy responses and safeguarding macroeconomic stability. The two primary tariff-like scenarios—36 percent versus 20 percent—provide a framework for evaluating the likely economic outcomes and for calibrating policy instruments to support sectors at risk of disruption. Industry voices and the business community add important perspectives about the opportunities and risks associated with broader zero-tariff coverage, highlighting the need for transparent implementation, credible timelines, and robust safety nets for vulnerable groups. Ultimately, Thailand’s negotiating posture embodies a commitment to inclusive, sustainable growth—leveraging expanded market access to strengthen competitiveness while ensuring that the benefits of liberalization flow across the economy, supporting farmers, SMEs, and manufacturing sectors alike.