# Thailand is considering implementing protective tariffs on imports from China

- Link: https://www.thailand-business-news.com/china/136523-thailand-is-considering-implementing-protective-tariffs-on-imports-from-china
- Published: 2024-04-18T15:33:56+07:00
- Author: ASEAN Briefing

**Thai government considering 7% VAT on Chinese goods under $40 to protect local
businesses. China is Thailand‘s largest trade partner with investments in industrial
development and tourism.**

 * [Thai Government Considers Imposing VAT on Chinese Goods](https://www.thailand-business-news.com/china/136523-thailand-is-considering-implementing-protective-tariffs-on-imports-from-china#thai-government-considers-imposing-vat-on-chinese-goods)
 * [Impact of Chinese Imports on Local Industry](https://www.thailand-business-news.com/china/136523-thailand-is-considering-implementing-protective-tariffs-on-imports-from-china#impact-of-chinese-imports-on-local-industry)
 * [Implications on Thailand-China Relations](https://www.thailand-business-news.com/china/136523-thailand-is-considering-implementing-protective-tariffs-on-imports-from-china#implications-on-thailand-china-relations)
 * [Protecting SMEs is vital for Thailand’s economy](https://www.thailand-business-news.com/china/136523-thailand-is-considering-implementing-protective-tariffs-on-imports-from-china#protecting-sm-es-is-vital-for-thailands-economy)

## Thai Government Considers Imposing VAT on Chinese Goods

The Thai government is contemplating enforcing a seven percent value-added tax on
Chinese products priced below 1,500 baht (US$40) that are funneled through Thailand‘s
free trade zones to safeguard local businesses affected by an influx of inexpensive
imports. Presently, goods under the 1,500 baht value are exempt from duties and 
VAT.

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## Impact of Chinese Imports on Local Industry

The Federation of Thai Industries has asserted that Chinese imports have led local
manufacturers to reduce production by approximately 50 percent. Moreover, data from
the Bank of Thailand shows that imported consumer goods comprised 24 percent of 
total imported goods in the first quarter of 2023, with 9.1 percent originating 
from China.

## Implications on Thailand-China Relations

The introduction of tariffs on Chinese imports could potentially affect bilateral
relations, given that China is Thailand’s largest trade partner. With bilateral 
trade hitting US$135 billion in 2023, Chinese investment and technology transfer
have greatly benefited Thailand’s industrial growth, especially in its pursuit to
become a regional EV hub.

Additionally, Thailand heavily relies on Chinese tourism revenue, with Chinese tourists
constituting the largest group of visitors prior to the pandemic, making up about
a quarter of the 40 million arrivals in 2019.

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## Protecting SMEs is vital for Thailand’s economy

For Thailand, protecting its SMEs and boosting their economic value will be vital
for the country’s GDP growth. SMEs contribute approximately 35.2 percent of Thailand’s
GDP, account for 99 percent of all businesses, and employ 70 percent of the country’s
workforce – thus demonstrating their significant economic impact and underscoring
their importance in driving overall economic growth and development in the country.
The government is aiming to increase the economic contribution of SMEs to 40 percent
of GDP by 2027.

However, despite their contribution, their participation in global value chains 
and international trade remains limited. Thai SMEs face significant barriers to 
growth, such as access to financing, as well as business management capabilities
needed to expand.

**Read the original article :** [Thailand Contemplates Protective Tariffs on Chinese Imports Amidst Surging Trade Deficit ](https://www.aseanbriefing.com/news/thailand-contemplates-protective-tariffs-on-chinese-imports-amidst-surging-trade-deficit/?rand=93901)

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