BGA Thailand Managing Director Teerasak “Art” Siripant and Analyst Jirawat Suriyashotichyangkul wrote an update to clients on new developments in Thailand’s trade environment.

Context

  • U.S. President Donald Trump issued an executive order on the eve of his August 1 tariff deadline, reducing Thailand’s tariff rate to 19 percent from the initial 36 percent announced April 2. The new rate places Thailand on par with Indonesia, Philippines, Malaysia and Cambodia. Vietnam earlier secured a 20 percent rate, and Japan, Korea and the European Union face 15 percent tariffs.
  • Thailand’s concessions to secure the reduced 19 percent tariff reportedly include broad exemptions on more than 10,000 U.S. import items, simplified customs procedures and investment incentives for U.S. firms, particularly in Thailand’s Eastern Economic Corridor. They also reportedly involve increased Thai imports of U.S. energy, aircraft and agricultural Lo alongside a commitment to cut Thailand’s $45.6 billion trade surplus with the United States by 70 percent within five years while retaining protection for key goods such as rice and sugar.

Significance

Losers

  • Corn farmers: With U.S. corn priced 26-30 percent cheaper, around 450,000 Thai smallholder households face significant income pressure.
  • Pig farmers: If pork imports are liberalized, 1.4 million Thai smallholders could be severely impacted, while large producers, such as CP Group, are better positioned to absorb shocks.

Winners

  • Feed manufacturers and processors benefit from lower costs for corn and soy inputs.
  • Large agribusiness players could gain from cheaper inputs and new opportunities to manage import channels.
  • Consumers could benefit from short-term price relief on pork and other meat, but long-term price volatility is possible if smallholder competition collapses, concentrating market power among a few large players.
  • Domestic protection retained: Tariffs remain for rice, sugar and processed fruit, shielding strategic agricultural sectors.
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Implications

  • Thailand’s revised tariff rate signals meaningful progress in talks with Washington. Grouping Thailand at 19 percent alongside its Southeast Asian peers suggests that the United States now sees these countries as “engaged partners” nearing comprehensive trade agreements. Although Thailand’s placement in the 19 percent band mirrors outcomes for Indonesia, the Philippines, Malaysia, and Cambodia, it does not necessarily imply coordination among Association of Southeast Asian Nations member states.
  • This outcome effectively places Thailand in the “optimistic scenario” outlined in BGA’s July 21 tariff tracker: a rate below 20 percent following intensified negotiations, which BGA projected would deliver a strong win for Thai exporters by boosting sentiment and helping preserve price competitiveness. Although the tariff risk has eased, the structural impacts from expanded U.S. market access, especially in agriculture, will continue to dominate domestic political and economic discussions.

We will continue to keep you updated on developments in Thailand as they occur. If you have comments or questions, please contact BGA Thailand Managing Director Teerasak “Art” Siripant at tsiripant@bowergroupasia.com.

Best regards,

BGA Thailand Team

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Managing Director

Art is an intuitive leader with a strong set of relationships with Thailand’s government, business, media and civil society leaders. His network spans a diverse set of stakeholders, from farmers in rural Thailand to the top echelons of Thailand’s political leadership. Prior to joining BGA, Art spent a decade serving as the chief political advisor to the Australian ambassador to Thailand. In this role, he had a front row seat to the most significant political and economic developments in Thailand. Earlier, he served as an army intelligence officer in the Royal Thai Armed Forces. Art has played a central role ... Read More