Thai exports face threat from proposed 36% US tariff
Manufacturing jobs at risk as trade tensions escalate and costs soar
The Employers’ Confederation of Thai Trade and Industry (EconThai) expressed concerns over the proposed 36% tariff on US imports of Thai products, highlighting potential challenges for the manufacturing sector and its workforce.
Set to be implemented on August 1, the proposed tariff surpasses those on imports from other Southeast Asian nations, with Vietnam facing a 20% tariff, Malaysia 25%, and Indonesia 32%. Exporters are expected to be the immediate victims, as the total export value could drop by over 50% this month, even before the tariff takes effect.
The EconThai group anticipates that factory workers will be affected in the latter half of 2025. Tanit Sorat, vice-chairman of EconThai and chairman of the National Labour Development Advisory Council, indicated that the increased tariff could lead to significant job losses, impacting the labour market into 2026.
The reciprocal tariff may compel manufacturers to cut production in industries such as tyres, air conditioners, home appliances, certain electronics, and processed agricultural goods. These sectors heavily rely on the US as a major export market.
Tanit noted that layoffs might occur as factories face heightened competition from Vietnam, Malaysia, and Indonesia. He warned of a potential slowdown in exports, a deceleration of the manufacturing sector, and a decline in the employment rate.
The Joint Standing Committee on Commerce, Industry and Banking previously cautioned that if US President Donald Trump implements the 36% tariff, Thailand’s GDP growth could drop to between 0.7% and 1.4%, with annual exports possibly decreasing by up to 2%. Tanit expressed concerns about the continuation of low economic growth into 2026.
In the long term, Thailand’s attractiveness as an investment destination in Southeast Asia may diminish, as foreign investors might prefer Vietnam and Indonesia due to lower energy costs and wages. Kriengkrai Thiennukul, chairman of the Federation of Thai Industries, remains hopeful about Thailand’s efforts to negotiate reduced tariff rates, reported Bangkok Post.
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