Trump slashes Thai tariffs to 19% – but is there a catch?
Fears remain over hidden costs for local businesses amid Trump’s latest gamble
US President Donald Trump has stunned Thailand and the wider ASEAN region by announcing a sharp cut in import tariffs on Thai goods, slashing rates from 36% to 19%.
The decision, made public yesterday, July 31, via the former US president’s Truth Social platform, came just hours before an executive order was signed, locking the deal in from today, August 1.
The move forms part of Trump’s wider tariff shakeup targeting ASEAN nations, which have secured trade deals with Washington. Alongside Thailand, Indonesia, the Philippines, Cambodia and Malaysia also fall under the new 19% rate, while Vietnam faces 20%. Singapore gets off the lightest, with just a 10% tariff.
Trump didn’t mince words when addressing tensions between Thailand and Cambodia either, warning that the US would walk away from trade talks altogether if the two countries failed to end hostilities. That pressure bore fruit, with a ceasefire agreement signed in Malaysia on July 28 following intense negotiations.
Thailand’s Deputy Prime Minister and Finance Minister Pichai Chunhavajira welcomed the development, calling it “a reflection of the strong alliance between Thailand and the United States.” He posted on Facebook that the 19% rate would “boost investor confidence” and help “open new opportunities for economic growth.”
Trade between the two countries remains a significant pillar of the Thai economy. Last year alone, Thailand recorded a trade surplus with the United States of around US$40 billion (about 1.4 trillion baht).
Government spokesperson Jirayu Huangsap hailed the breakthrough as a “significant achievement,” adding that the new rate places Thailand on par with major regional exporters like Vietnam and the Philippines, preserving competitiveness across ASEAN.
In a surprising twist, US Commerce Minister Howard Lutnick expressed shock at Thailand’s successful negotiation with Cambodia, after months of diplomatic strain. Transhipment tariffs — penalties applied to goods suspected of altering origin to bypass duties — remain high. Vietnam faces 40%, while Indonesia incurs 19% plus reciprocal charges, reports KhaoSod.
Thailand appears unaffected for now.
Thailand’s government isn’t taking the win for granted. A raft of support measures is in the works to protect entrepreneurs and farmers from potential ripple effects, including subsidies, soft loans and tax reforms.
“The world is changing fast,” said Pichai. “We must adapt faster.”
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