Mr. Bundit Sapianchai, Director and Acting President of Export-Import Bank of Thailand (EXIM Thailand), revealed that Team Thailand led by Mr. Pichai Chunhavajira, Deputy Prime Minister and Minister of Finance, has successfully negotiated the reciprocal tariff agreements with the US, resulting in a rate reduction to only 19%, which is lower than that earlier expected and is a key factor to keeping Thailand’s competitiveness in the global markets. The 19% rate is close to that secured by Vietnam, a principal competitor, and equal to that applicable to Malaysia, Indonesia, and the Philippines (19%), while Japan and South Korea enjoy a lower rate of 15% but have higher overall production costs than Thailand.
Mr. Bundit said that the 19% tariff rate on Thai goods will benefit Thailand in its attraction of foreign direct investment, enabling the country to maintain its manufacturing and investment bases. This includes the US direct investment, particularly in high-tech and innovation-driven businesses. Thailand will also be better positioned to fetch market shares from countries subject to higher US tariff rates, such as India (25%) and Mexico (25%) pending further negotiations, and Canada (35%).
According to Mr. Bundit, this positive news would support the country’s economy and export growth prospects for 2025, with Thai export growth likely to exceed the 0.5-1.5% range previously forecast by EXIM Thailand. This development would also ease exporters’ concerns, despite under certain price pressures, particularly among those with low margins and SMEs which are vulnerable business-wise. Meanwhile, Thailand must continue to properly apply the rule of origin of its goods to avoid facing an additional 40% tariff in cases of transshipment.
Mr. Bundit further said that, as a state-owned specialized financial institution under the supervision of the Ministry of Finance, EXIM Thailand has consistently assisted its customers, promoting and supporting Thai entrepreneurs in businesses related to international trade to ensure their business continuity. The Bank has taken measures to mitigate the impacts of the US reciprocal tariff policy on Thai entrepreneurs, such as the establishment of EXIM Export Clinic, and provision of advice and assistances to affected exporters and importers, comprising extension of loan repayment term of up to 365 days, enhancement of financial liquidity, and interest rate reductions, as well as expanded cooperation with the Ministry of Commerce and other relevant agencies to encourage Thai entrepreneurs, SMEs in particular, to expand their businesses into promising new frontier markets.
“We would like to thank Team Thailand for their successful tariff negotiations with the US. This is a major move to safeguard Thailand’s interests and uplift its potential on the global economic front, strengthening confidence of trade partners and boosting the competitive advantages of Thai entrepreneurs in the global trade markets. The tariff agreement also reflects the strong and long-standing relationship between Thailand and the US in multi-faceted areas, covering economy, trade, investment, and sustainable development. EXIM Thailand will remain steadfast in working alongside both the public and private sectors, supporting Thai entrepreneurs with financial solutions and risk management tools made available for international trade and investment in both principal and new frontier markets, and driving Thailand’s sustainable development across all dimensions,” added Mr. Bundit.