Thailand Faces US Tariffs Over Circumvention and Excess Capacity

Thansettakij•Economy•15h ago

Reader Briefing

Thailand is preparing to negotiate with the US to prevent high tariffs related to structural excess capacity and product circumvention.

•The US is investigating 'circumvention' and structural excess capacity, placing Thailand in Tier 2 for risk analysis.
•Thailand currently pays a 12.5% tariff since July 24, 2026, due to forced labor issues.
•A Thai delegation will negotiate with the US from August 27 to September 1, 2026, regarding the Agreement on Reciprocal Trade.
•The Department of Foreign Trade estimates combined tariffs for forced labor and excess capacity should not exceed 19-20%.

Overview

•The US is using trade measures to push the Agreement on Reciprocal Trade (ART) to encourage partners to import more US goods.
•Thailand is currently categorized as Tier 2, meaning risky product groups may face intensive origin inspections, particularly those linked to Chinese supply chains.
•Wisit Limluecha stated Thailand must prove it is a real production base by showing factory capacity utilization averages over 70%.
•Associate Professor Dr. At Phisanwanich warned that if the US shifts to company-level inspections, it could lead to container seizures or anti-dumping duties.
•Supajee Suthamphan reported that approximately 72% of Thai goods are currently exempt from US tariffs, while 28% remain subject to them.
•The Thai team will travel to negotiate with the US between August 27 and September 1, 2026.
•Dr. At Phisanwanich proposed creating a risk product list and a Thai Origin Traceability system using AI to distinguish real production from simple transshipment.
•The Department of Foreign Trade noted that the 12.5% forced labor tariff might be canceled in the future as it is being contested in a US international trade court.

Full article content is available on the original source.

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Source: Thansettakij (Original)

Key Quotes

Wisit Limluecha

"What we expect is the lowest tax rate, but if it is unavoidable, Thailand must not be at a disadvantage compared to competitors."

สิ่งที่เราคาดหวังคืออัตราภาษีต่ำที่สุด แต่หากหลีกเลี่ยงไม่ได้ ไทยต้องไม่เสียเปรียบคู่แข่ง

Key Entities

Person

Wisit Limluecha(วิศิษฐ์ ลิ้มลือชา)

Vice Chairman of the Thai Chamber of Commerce.

At Phisanwanich(อัทธ์ พิศาลวานิช)

An international economics and ASEAN expert.

Supajee Suthamphan(ศุภจี สุธรรมพันธุ์)

Deputy Prime Minister and Minister of Commerce.

Arada Fuangthong(อารดา เฟื่องทอง)

Director General of the Department of Foreign Trade.

Organization

Thai Chamber of Commerce(หอการค้าไทย)

An organization represented by Wisit Limluecha in discussions regarding US trade pressure.

Ministry of Commerce(กระทรวงพาณิชย์)ℹ️

The ministry led by Supajee Suthamphan overseeing trade negotiations with the US.

Department of Foreign Trade(กรมการค้าต่างประเทศ)

The government agency preparing the Thai team for negotiations with the US.

Customs Department(กรมศุลกากร)

An agency suggested for data integration to monitor abnormal export increases.

Ministry of Industry(กระทรวงอุตสาหกรรม)ℹ️

An agency suggested for data integration to monitor export data.

BOI

An organization suggested for data integration regarding investment and exports.

Industrial Estate Authority(การนิคมอุตสาหกรรม)

An organization suggested for data integration regarding production and exports.

Place

United States(สหรัฐฯ)ℹ️

The country imposing tariffs and investigating Thai exports for circumvention and excess capacity.

China(จีน)ℹ️

A country suspected by the US of using third countries as production bases or transit points to enter the US market.

Thailand(ไทย)ℹ️

The country negotiating trade terms and facing tariffs from the US.

Policy

Agreement on Reciprocal Trade (ART)

A US trade policy aimed at pushing trading partners to open their markets and import more US goods.

The Great Transshipment Scam

A report published by the White House that placed Thailand in Tier 2.

Law

Section 232(มาตรา 232)ℹ️

A US legal provision under which some Thai goods received tax exemptions.