Washington: Ending the confusion, the United States has officially adjusted the tariffs imposed on Thailand, reducing the increase from the initially reported 37% to 36%. This adjustment in reciprocal tariffs marks a significant moment in the ongoing trade disputes impacting both nations.
According to Thai News Agency, the increase in tariffs is expected to have a notable impact on Thailand's economy. Analysts predict that the tax hike will potentially reduce the country's economic growth by 1-2%, with the Gross Domestic Product (GDP) for 2025 potentially failing to reach a 2% growth. The Federation of Thai Industries has expressed concern, estimating a revenue loss of 800,000-900,000 million baht for Thailand due to these increased tariffs.
In response to the US's move, China has announced its own countermeasures, imposing a 34% tax on all imported goods from the United States, starting April 10, 2025. This escalation has contributed to a sharp decline in both global and Thai stock markets. Analysts have indicated that the trade war is adversely affecting the American economy as well, leading to a decline in economic performance.
The tariffs are part of a broader strategy initiated by an Executive Order (EO) signed by President Trump on April 2, 2015, under the International Emergency Economic Powers Act of 1977 (IEEPA). The EO outlines several key points, including a baseline tariff of 10% on imports from all countries, with higher individualized reciprocal tariffs for nations with significant trade deficits with the US, such as Thailand's 36% rate effective from April 9, 2025.
Certain goods are exempt from these tariffs, including those under Article 232 like steel and aluminum, items in Annex II of the EO, and goods eligible under the US-Mexico-Canada Agreement (USMCA) that meet specific criteria. Additionally, goods valued under $800 will receive duty-free treatment.
The US government, through various departments, may recommend additional measures if the current tariffs fail to address the trade deficit or if retaliatory measures are taken by trading partners. If partners take significant steps towards resolving trade issues, there could be a reconsideration of the tariffs' scope.
Thailand's approach remains one of negotiation, hoping for a reduction in the US-imposed tariffs as outlined in the Executive Order. However, the evolving trade dynamics and retaliatory actions by other nations continue to shape the economic landscape for both the US and its trade partners.
