Thailand is close to reaching a trade agreement with the United States to reduce the upcoming 36% tax on exports before August 1.
The negotiations aim to protect exports, reduce trade surplus, and promote U.S. investment, helping Thailand stabilize its economy amid political instability and rising debt.
MAIN CONTENT
Thailand and the United States are nearing completion of negotiations for a 36% export tax reduction effective from August 1, 2025.
Thailand is committed to increasing imports of U.S. goods and attracting investment to balance trade.
Is Thailand really close to reaching a tax reduction agreement with the United States?
Thailand has completed over 90% of the negotiations, with only a few minor details left to resolve before presenting the final proposal to the United States, according to Finance Minister Pichai Chunhavajira.
According to Mr. Pichai, the country has provided nearly all the information requested by the United States. U.S. officials are still sending additional detailed questions to ensure a complete proposal before imposing the 36% tax at the beginning of August.
"We have completed more than ninety % of the negotiations. Today or tomorrow will be the final steps, just a little more to go."
Pichai Chunhavajira, Finance Minister of Thailand, July 2025
The tax reduction will be similar to the preferential tax rates of Vietnam (20%) and Indonesia (19%), aimed at easing pressure on Thai exports, which accounted for up to 18% of the value to the U.S. in 2024.
What impact does increasing imports of U.S. goods have?
Thailand is committed to significantly increasing imports of U.S. products such as agricultural products, Boeing aircraft, and LNG to reduce the trade surplus of 46 billion USD from the previous year while balancing trade relations with the United States.
"These new measures could reduce the trade surplus by up to 70% in 3 years and bring the trade balance closer in the next 5 years."
Thai Chamber of Commerce, advisor to the Ministry of Finance, July 2025
Expanding the tax-exempt list of U.S. goods from 60% to 90% of products also facilitates deeper investment cooperation, including the Alaska gas project supported by the United States.
What domestic economic challenges is Thailand facing?
In addition to trade pressures, Thailand is under significant pressure from weak consumption and the highest household debt in Southeast Asia.
In the context of political instability due to Prime Minister Paetongtarn Shinawatra being suspended over a border dispute with Cambodia, a favorable outcome in tax negotiations will help alleviate investors' concerns.
At the beginning of 2025, Thai exports are expected to grow by about 15%, thanks to increased exports as the United States temporarily delays the tax for 90 days.
What does this trade agreement mean in the long run?
Achieving a tax reduction agreement will not only maintain Thailand's largest export market but also promote foreign direct investment, contributing to economic stability and improving U.S.-Thai relations.
Country Export tax rate applied by the United States Tax-free import rate of U.S. goods Expected impact Thailand Decrease from 36% to equivalent Vietnam, Indonesia 90% Reduce surplus, balance trade in 5 years Vietnam 20% – Tax incentive Indonesia 19% – Tax incentive
Frequently Asked Questions
How much % of the negotiation process have Thailand and the United States completed?
More than 90% of the negotiation process has been completed, according to the Finance Minister of Thailand.
When is the 36% export tax applicable?
The tax will officially take effect from August 1, 2025.
What commitments is Thailand making to balance trade with the United States?
Thailand will increase imports of U.S. goods such as agricultural products, Boeing aircraft, LNG gas, and expand the tax-exempt list.
How will reaching an agreement impact the Thai economy?
Help mitigate export damage, reduce trade surplus, and improve investor confidence amid political instability.
What domestic challenges is the Thai economy facing?
Low consumption and the highest household debt in the region are major pressures currently.
Source: https://tintucbitcoin.com/thai-lan-gan-hoan-tat-dam-phan-my/
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