Thailand Tariff Avoidance Strategy: A Risky Gamble to Win Over US?
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Thailand Tariff Avoidance Strategy: A Risky Gamble to Win Over US?

Published on: Jul 10, 2025 | Author: Marketing & Communications

Thailand has unveiled an urgent and bold Thailand Tariff Avoidance Strategy in an effort to prevent a looming 36% tariff on its exports to the United States. With the US accounting for 18.3% of Thailand’s exports (worth approximately $55 billion in 2024), this proposal could determine the future of Thailand’s economic stability and trade growth.

Massive Trade Surplus and Rising Pressure

Thailand currently maintains a $46 billion trade surplus with the US. Under its revised plan, the government aims to reduce this surplus by 70% within five years, with balanced trade projected by 2031–2032. This timeline is significantly faster than previous goals, reflecting the urgent need to avoid severe economic shocks from US tariffs.

Export Surge Amid Tariff Pause

The urgency behind the Thailand Tariff Avoidance Strategy became clear when Thai exports surged by about 15% in the first five months of 2025. Businesses rushed to ship goods during the 90-day tariff pause, front-loading orders to avoid the potential 36% tariff. While this surge temporarily boosted export figures, it also exposed the high stakes for Thailand’s exporters.

One of the most vulnerable sectors is the automotive industry, which makes up 40% of Thailand’s US exports. Analysts warn that if tariffs remain in place, automotive shipments could contract by 10–15%, risking significant job losses and factory slowdowns.

Bold Concessions in Thailand Tariff Avoidance Strategy

In a major move, Thailand’s new proposal offers zero tariffs on thousands of US products, with a focus on agricultural goods, to quickly adjust the trade balance. This key part of the Thailand Tariff Avoidance Strategy demonstrates Thailand’s willingness to make deep concessions to maintain its US market access.

Additionally, Thailand has pledged to make major purchases from the US. The commitments include buying up to 80 Boeing aircraft and importing up to 2 million tonnes of liquefied natural gas (LNG) annually. These large-scale deals aim to immediately boost US exports to Thailand and address American trade concerns.

Risks to Economic Growth and Market Stability

The US is not just another market for Thailand; it is the largest. Losing access or facing steep tariffs could drag down Thailand’s economic growth to just above 1% in 2025. This slowdown risks shaving up to 1% off national GDP growth and undermining investor confidence.

Meanwhile, Thailand’s ports have already felt the effects. During the tariff reprieve, container volumes and transshipment activities surged. If tariffs are imposed, there is a risk of cargo diversion, delays, and rising costs throughout the supply chain.

Thailand Tariff Avoidance Strategy: A Critical Juncture for Thailand’s Economy

The Thailand Tariff Avoidance Strategy is a high-stakes gamble that showcases Thailand’s determination to protect its exports and maintain market stability. By offering zero tariffs on US goods and committing to major purchases, Thailand is signaling its readiness to take difficult steps to secure its economic future. Whether these concessions will be enough to satisfy US policymakers remains to be seen. However, one thing is clear: the outcome of this negotiation will shape Thailand’s trade landscape for years to come and determine its ability to navigate an increasingly complex global market.

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