Thaksin ready to 'reset policies and tighten exports controls to win US

Former Prime Minister Thaksin Shinawatra stated at a seminar organised by the American Chamber of Commerce in Thailand (AMCHAM) on April 24 that Thailand needs to "overhaul" its import regulations and investment promotion policies—key elements in driving the recent influx of "Chinese capital" into the country. 

He explained that US reciprocal tariff measures could severely impact Thailand’s export-driven economy.

Thaksin said Thailand should view the US tariff, levied at rates as high as 36%, as a “wake-up call” for the government, led by his daughter, Prime Minister Paetongtarn Shinawatra, to crack down on foreign manufacturers that circumvent local content rules. He cited the electric vehicle (EV) industry as an example, noting that it has attracted billions of dollars in investment from numerous Chinese EV makers in recent years due to government incentives.

“We run a large trade deficit with China and a moderate surplus with the US. Perhaps there is something wrong with this picture,” Thaksin said. “So, we are going to adjust our policies in response to US tariffs.”

The former prime minister’s remarks came as Thai government officials are preparing for trade negotiations with the United States to seek a reduction in reciprocal tariffs. Thailand is among the countries facing the highest tariff rate, up to 36%. 

The US is Thailand’s largest export market, and the country recorded a trade surplus of approximately $46 billion with the US last year.

Thaksin’s comments also signalled a potential "shift in Thailand’s stance," as the country has greatly benefited in recent years from an influx of Chinese investment, driven by the global trend of supply chain relocation.

Between 2022 and 2024, a significant number of Chinese companies—including affiliates of ByteDance, whose headquarters are in Singapore—emerged as the largest source of foreign direct investment (FDI) in Thailand. According to data from the Board of Investment (BOI), Chinese firms accounted for nearly 28% of all FDI in the country during that period, more than three times the share of American companies, which made up about 8% of total foreign investment.

The ongoing trade war has also underscored the "dilemma" facing many countries, including Thailand, despite their efforts to maintain neutrality.

While Washington has been pressuring several nations to “limit trade with Beijing and curb China’s manufacturing dominance” in exchange for eased tariffs, the Chinese government has issued its own warnings. Beijing has cautioned countries against entering into any agreements with the US that could undermine China’s interests, vowing to take retaliatory measures if necessary.

The former prime minister also stated that Thailand is open to adjusting its import tariff policies to support greater access for US goods, signalling a shift toward pursuing more bilateral trade agreements instead of relying solely on the multilateral framework of the World Trade Organisation (WTO). 

He cited products such as corn and liquefied natural gas (LNG) as examples of US exports that Thailand plans to import more of in an effort to help narrow the trade gap.

Despite holding no official position in the administration led by his daughter, Thaksin is widely seen as a key figure influencing and shaping government policy.

As for the progress in trade talks between the US and Thailand, officials from both countries have postponed negotiations that were originally scheduled for this week. Prime Minister Paetongtarn stated that “the Washington administration wants the Thai government to review certain issues first,” prompting her to instruct officials to crack down on the misuse of certificates of origin by foreign companies seeking to evade higher US tariffs.

Additionally, Thailand’s Finance Minister said earlier this week that the country would also consider US concerns about currency manipulation.

Thailand’s “wait-and-see” approach in the tariff negotiations has raised questions about the government’s overall trade strategy, especially as neighbouring Southeast Asian countries like Indonesia and Vietnam have made clearer progress in their respective talks with the US.

Thaksin acknowledged that “negotiating with the US is quite difficult,” but reassured American business leaders that Thailand is well-prepared and ready to engage with Washington.

“Negotiations aren’t as simple as just asking, 'What would be a fair tax rate?’” Thaksin said. “But the government is well-prepared and ready to sit down and talk whenever they’re ready.”