Thailand races to avert US tariffs with sweeping trade offer

Thailand is making a final push to avoid steep U.S. export tariffs by offering significantly greater market access to American goods and stepping up purchases of U.S. energy and Boeing aircraft.

The move comes just ahead of the July 9 deadline to resolve a trade dispute that could see Washington impose a 36 per cent levy on Thai exports, Caliber.Az reports, citing foreign media.

Bangkok’s revised proposal was submitted late on July 6 and aims to cut its US$46 billion trade surplus with the United States by 70 per cent within five years, reaching trade balance in seven to eight years. That is faster than a previous pledge to eliminate the gap within a decade, Thai Finance Minister Pichai Chunhavajira said on July 7.

“What we’re offering them is a mutually beneficial proposal,” Pichai said. “The US can trade more with us and we get the chance to clean up our process and cut red tapes.”

If Washington accepts the proposal, Thailand could immediately remove tariffs and non-tariff barriers on the majority of U.S. goods, with more sensitive products seeing a gradual phase-out. Many of the American goods on the list are already in short supply in Thailand, meaning their increased import is unlikely to hurt local farmers or manufacturers, according to Pichai.

The offer follows a July 3 ministerial-level meeting between Pichai, U.S. Trade Representative Jamieson Greer, and Deputy Treasury Secretary Michael Faulkender—the first such high-level tariff talks between the two countries.

Thailand is seeking to avoid the fate of regional peers like Vietnam, which recently secured a deal with the U.S. but still faces tariffs of 20 per cent on general exports and 40 per cent on goods suspected of transshipment. By contrast, Thailand is pushing for a best-case rate of 10 per cent and would accept a range between 10 and 20 per cent.

“The worst thing that can happen is we get the worst deal out of our regional neighbours,” Pichai warned.

As part of its revised strategy, Thailand has made more aggressive pledges on purchasing U.S. energy. State-backed PTT has committed to buying two million tons of LNG annually over 20 years from the Alaska gas project. Thai petrochemical firms like SCG Chemicals and PTT Global Chemical will also boost imports of U.S. ethane, and state firms are exploring potential co-development of American energy ventures.

In aviation, Thai Airways has signalled plans to purchase up to 80 Boeing aircraft in the coming years, further helping to reduce the bilateral trade imbalance.

A favourable outcome is seen as critical for Thailand’s export-driven economy, already strained by Southeast Asia’s highest household debt and weak domestic demand. Analysts warn that failure to secure a deal could reduce Thai GDP growth by up to 1 percentage point.

The trade standoff comes amid political instability following the court-ordered suspension of Prime Minister Paetongtarn Shinawatra, which has unsettled investors. A breakthrough in talks with Washington would help restore confidence and provide a buffer against external shocks.

Thailand’s exports have surged by 15 per cent in the first five months of the year, largely due to front-loaded orders during the 90-day pause on tariffs announced by U.S. President Donald Trump.

By Vugar Khalilov