Nation edgy as decision day looms

Thailand nervously awaits the outcome of negotiations with the US in the hope of a more favourable tariff rate

- PHUSADEE ARUNMAS

The new US tariffs are set to have global repercussions and impact various countries unless negotiations for more favourable rates can be achieved prior to Aug 1.

The US intends to impose a 36% reciprocal tariff on Thai goods, which could hinder the competitiveness of Thai products in the US market, especially when compared with rival nations such as Vietnam.

Aat Pisanwanich, an analyst in international economics and advisor on Asean affairs at Intelligence Research Consultant, recently explored the implications of the policy, its potential impact, and outlined actions that Thailand ought to pursue moving forward.

What are the main objectives of the US tariff measures?

The primary goal of the American tariffs is to lower deficits with its trading partners.

Last year, the US recorded a global trade deficit of US$1.2 trillion.

Additionally, the government aims to boost its revenue from the elevated tariffs to make up for declines in corporate and personal income tax receipts.

The revenue generated from these tariffs is expected to be dedicated to military spending and managing immigration under the One Big Beautiful Bill Act (2025).

For the 2025 fiscal year, US tariff revenue is projected to reach $100 billion, based on the implementation of universal tariffs at 10%.

Should reciprocal tariffs be introduced on Aug 1, the US will gain even more in tariff revenue and could potentially lure investment back to the nation.

What are the principles behind the US tariffs?

The US has imposed new tariffs, commonly referred to as the “Trump Tariffs” on nearly all countries due to its significant and prolonged trade deficits. These tariffs fall into two main categories:

Universal tariffs: Trump announced a baseline 10% universal tariff on all imports to the US, regardless of whether the US has a trade surplus or deficit with them. These tariffs came into effect on April 5.