# Thailand Faces Major Threats from Global Trade Slowdown

- Link: https://www.thailand-business-news.com/economics/211139-thailand-faces-major-threats-from-global-trade-slowdown
- Published: 2025-04-24T09:40:14+07:00
- Author: Economic Intelligence Center Siam Commercial Bank

**Trump’s import tariffs could raise U.S. rates significantly, impacting Thailand
with a 36% tariff. This may harm Thai exports and intensify global trade competition,
prompting urgent negotiations for mitigation.**

## Implications of Trump’s Tariff Announcement

SCB EIC highlights the far-reaching consequences of President Trump’s import tariff
announcement on April 2, which could increase the U.S. effective tariff rate by 
18-22%. This dramatic increase poses significant challenges to both the U.S. economy
and global trade dynamics, intensifying competition among trading nations.

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 1. **Thailand’s trade relationship with the U.S.**: Thailand faces one of the highest
    U.S. import tariffs at 36% following Trump’s new tariff policy. This is notably
    higher than the global and Asian averages, emphasizing the significant trade deficit
    Thailand has with the U.S.
 2. **Ripple effects on global trade**: The tariff hike could lead to intensified global
    trade competition, with countries racing to find alternative markets amid economic
    slowdowns in key trading partners like China.
 3. **Strategic trade negotiations**: SCB EIC advises the Thai government to tackle
    issues prioritized by the U.S., such as intellectual property violations, labor
    rights, and lowering trade barriers, to mitigate the tariff’s impact.

## Thailand’s Vulnerability to Tariff Increases

Thailand is uniquely impacted by these tariff hikes, facing an import tariff rate
of 36%. This places the country 20th out of 185 U.S. trading partners, indicating
a substantial trade deficit with the U.S. This rate is notably higher than both 
the global average of 16% and Asia’s average of 21%, exposing Thailand to significant
economic repercussions.The high tariff rate affects various sectors, including electronics,
automotive, and agriculture, which are crucial to Thailand’s export economy.

Businesses in these industries may face reduced competitiveness in the U.S. market,
leading to potential declines in sales and revenue. Moreover, the increased costs
of exporting to the U.S. could prompt Thai companies to seek alternative markets
or adjust their pricing strategies, impacting their overall profitability.In response
to these challenges, the Thai government may need to consider negotiating trade 
agreements or seeking tariff exemptions to mitigate the adverse effects. Additionally,
diversifying export destinations and investing in innovation and quality improvements
could help Thai businesses remain competitive globally.

## Urgent Need for Diplomatic Engagement

To mitigate these challenges, the Thai government must urgently engage in negotiations
focused on U.S. priorities from the March 2025 National Trade Estimate Report. Key
areas include reducing trade surpluses, lowering non-tariff barriers, and addressing
intellectual property and labor rights issues, all while aligning with Thailand’s
national interests.

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