Thailand is preparing a fresh round of proposals in its ongoing tariff talks with the United States, aiming to bring down the current 12.5% levy imposed under Section 301 through wider trade and investment cooperation.
Vice Minister of Commerce Kirida Bhaopichitr gave an update on the negotiations, explaining that Thailand has faced two allegations from Washington. The first is that Bangkok lacks safeguards against imports made using forced labour. The second is that state subsidies to private industry have caused production overcapacity.
On the forced labour issue, Kirida said Thailand has already signed a trade agreement with the US that resolves the matter. In return, Washington has granted tariff exemptions on more than 2,000 Thai products, covering roughly 60% of the kingdom’s exports to the US.
Thailand has also pushed back on the overcapacity claim. Studies carried out with relevant agencies found that capacity utilisation in the industries Washington flagged, including automobiles and parts, rubber, pharmaceuticals, and machinery and equipment, sits between 75% and 95%. That, Kirida said, undercuts the US argument that these sectors are running significant excess capacity.
The next round of negotiations is set for later this month. The Thai government plans to propose deeper economic cooperation with Washington, including encouraging Thai companies to invest more in the US and increasing imports of American energy, aircraft, soymeal, and corn. The goal is to keep the tariff rate below 19%. The package will also include enhanced defence cooperation between the two countries.
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