Thailand submits new trade proposal offering zero tariffs on many US goods
Thailand's new Finance Minister and Deputy Prime Minister Pichai Chunhavajira reacts on the day of the cabinet meeting at Thai Government House in Bangkok, Thailand on May 7, 2024. (File photo: REUTERS/Chalinee Thirasupa)
BANGKOK: Thailand has submitted a new trade proposal to the United States, offering to cut levies to zero on many US imports in a bid to avoid steep tariff hikes on its own products, the finance minister said on Monday (Jul 7).
Washington has threatened to impose a 36 per cent levy on Thai imports if no reduction is negotiated before Jul 9, when a 90-day pause capping tariffs at a baseline of 10 per cent for most nations expires.
The United States accounted for 18.3 per cent of Thailand's shipments last year, amounting to US$54.96 billion in value, making it Thailand's biggest export market. Washington says its deficit with Thailand stood at US$45.6 billion.
"We heard their feedback and what they were especially interested in, and we adjusted it (the trade proposal)," Minister Pichai Chunhavajira told reporters, who returned from Washington last week following talks.
The US Trade Representative's office praised Thailand's efforts but suggested minor adjustments, Pichai said.
He said the improved proposal includes zero tariffs on many US imports and other measures that aim to bring trade with the United States into balance in less than 10 years, sooner than earlier proposed. It also includes commitments to increase imports of American goods to boost bilateral trade.
"It's not just about reducing tariffs but also about opening up trade further," he said.
"Of course, we are not offering a 0 per cent tariff across the board, but we are providing zero tariffs on a substantial number of items," Pichai said.
"In my view, the conditions we have proposed are very favourable and should satisfy them," he added.
Trade talks are expected to continue after the tariff pause ends, as negotiating trade terms requires consultations among multiple stakeholders, Pichai said.
Thailand's top three exports to the United States last year were computers, teleprinters and telephone sets, and rubber products. Its top three imports from the US were crude oil, machinery and parts, and chemicals.
Pichai said earlier that Thailand would import more US natural gas and cut tariffs on imports of corn from the United States. US corn is subject to a 73 per cent import tax, according to the Thai Feed Mill Association.
The Thai state-owned energy giant, PTT Group in June signed an agreement to procure 2 million metric tonnes of liquefied natural gas per year from Glenfarne's Alaska LNG project over a 20-year term. The US$44 billion project has been championed by US President Donald Trump.
Pichai earlier said Southeast Asia's second-largest economy could expand by just over 1 per cent this year due to the impact of US tariffs.
Thailand's economy has struggled with weak consumption, soaring household debt, slowing tourism, trade uncertainty and potentially steep US tariffs.
Last month, the central bank forecast economic growth of 2.3 per cent this year, after last year's growth of 2.5 per cent lagged peers in the region.
