Thailand Seeks Tariff Cuts in US Trade Talks

Thailand has proposed a meeting between Prime Minister Anutin Charnvirakul and US President Donald Trump in New York on September 17 or 18, with bilateral trade negotiations and tariff rates at the centre of the agenda. Commerce Minister Suphajee Suthumpun said Bangkok hopes to complete the technical negotiations before the leaders meet, leaving the tariff rate and final adjustments for the political discussions. The United States is Thailand’s largest export market, accounting for around 24% of Thai exports so far this year. Washington imposed a 12.5% tariff on Thai imports in July, making the outcome of the current negotiations particularly important for Thai manufacturers and exporters competing with producers elsewhere in Asia. Bangkok is seeking tariff treatment comparable with Thailand’s regional competitors. The government’s negotiating position reflects concern that a relatively higher US tariff could encourage American buyers to shift sourcing toward Vietnam, Malaysia or other ASEAN production centres, particularly in electronics, machinery, automotive components and consumer goods. The talks also come against a backdrop of broader changes in Thai-US economic relations. The two countries have previously committed to expanding cooperation in investment, digital trade, energy and critical-mineral supply chains, while Thailand has signalled a willingness to increase purchases of US goods and energy as part of a wider effort to rebalance bilateral trade. For Thai businesses, the immediate issue is not only the headline tariff but also the treatment of rules of origin, non-tariff barriers and sector-specific exemptions. A deal that provides Thailand with predictable market access could reduce uncertainty for exporters and encourage companies to maintain or expand production capacity in the country. Thailand is establishing a THB1 billion private-equity trust designed to provide growth capital to technology and other New Economy businesses, addressing a persistent funding gap between early-stage financing and public-market listings. The initiative is being developed with the Stock Exchange of Thailand and is intended to help promising companies scale before eventually accessing the capital market. The programme is part of a broader effort to deepen Thailand’s domestic investment ecosystem. While the country has attracted substantial foreign investment in electronics, digital infrastructure, EVs and other advanced sectors, domestic companies often struggle to secure the larger pools of capital needed for expansion, technology investment and international growth. The trust is particularly relevant to Thailand’s emerging technology sector because traditional bank lending is often poorly suited to businesses whose main assets are intellectual property, software, data or future growth potential. Private-equity financing can provide longer-term capital without imposing the same collateral requirements as conventional corporate loans. The initiative also complements the Board of Investment’s new efforts to encourage promoted companies to list domestically. The “BOI to IPO” programme provides additional incentives to qualifying New Economy companies that eventually list on SET, mai or LiVEx, creating a potential pipeline from government-supported investment to private capital and ultimately public markets. Thailand’s capital-market authorities are seeking to increase the number of high-growth domestic companies able to scale locally rather than selling to foreign investors or moving their headquarters overseas. The strategy is particularly important as Thailand competes with Singapore, Malaysia, Vietnam and Indonesia for technology entrepreneurs, venture capital and advanced manufacturing investment. Japan recorded a 1.106 trillion yen (US$7.12 billion) trade deficit in August, its fourth consecutive monthly shortfall, as soaring energy costs pushed imports sharply higher. Imports jumped 28% year on year to 11.15 trillion yen, exceeding the 26.3% market forecast, while exports rose a strong 19.3%, marking their 12th consecutive month of growth. The export performance was driven by strong demand for semiconductor-related products and higher non-ferrous metal prices. Shipments to the United States increased 24.9%, while exports to China rose 20.6%, demonstrating continued strength in Japan’s technology and industrial supply chains despite rising geopolitical and energy risks. Energy costs, however, are rapidly changing the import picture. The value of Japan’s crude-oil imports increased 58.7%, while import volumes rose 3.6%, reflecting the impact of oil prices above US$100 a barrel following disruptions to Middle Eastern energy infrastructure and shipping routes. The weak yen has further amplified the cost of imported commodities. The data strengthen expectations that the Bank of Japan will raise its policy rate from 1% to 1.25% at its upcoming meeting. The BOJ is confronting a difficult combination of persistent inflation, rising import costs and strong corporate investment, while higher interest rates could strengthen the yen and put pressure on exporters. Japan’s experience is particularly relevant for Thailand because both economies are highly integrated into Asian manufacturing supply chains and exposed to imported energy. A prolonged oil shock could similarly raise Thailand’s import bill while simultaneously supporting demand for some technology and industrial exports. Why it matters: Japan’s figures show how quickly higher oil prices can overwhelm otherwise strong export performance. For Thailand, the lesson is equally important: electronics and industrial exports may benefit from regional demand, but an extended energy shock could weaken the current account, raise inflation and complicate the monetary-policy outlook.