Thailand pitches new deals to slash US tariffs

Thailand Seeks to Reduce US Tariffs through New Trade Proposals

Thailand is preparing to submit a new set of proposals to the United States in an effort to lower the current 12.5% tariff imposed under Section 301. The tariffs are part of an ongoing trade negotiation between the two countries, with Thailand aiming to reduce the levy through increased trade and investment cooperation.

According to Vice Minister of Commerce Kirida Bhaopichitr, Thailand has faced two allegations from the US. The first allegation is that Thailand lacks adequate safeguards against imports made using forced labor. The second allegation is that state subsidies to private industry have led to production overcapacity.

In response to the forced labor issue, Kirida noted that Thailand has already signed a trade agreement with the US, which has resulted in tariff exemptions on over 2,000 Thai products. These exemptions cover approximately 60% of Thailand’s exports to the US.

Regarding the overcapacity claim, Thailand has conducted studies with relevant agencies, which found that capacity utilization in the affected industries, including automobiles and parts, rubber, pharmaceuticals, and machinery and equipment, ranges from 75% to 95%. This, according to Kirida, undermines the US argument that these sectors are operating with significant excess capacity.

The next round of negotiations is scheduled to take place later this month. The Thai government plans to propose deeper economic cooperation with the US, including encouraging Thai companies to invest more in the US and increasing imports of American energy, aircraft, soymeal, and corn. The goal is to keep the tariff rate below 19%. The proposal will also include enhanced defense cooperation between the two countries.

Article and image source: thethaiger.com