Thailand and US Begin Tariff Talks with 'Flexible' Approach
First round of technical negotiations offers positive signs for trade relations, but key 'red line' issues and looming fees remain a concern
- Thailand and the US have started their first round of technical tariff negotiations, with the US reportedly adopting a flexible and cooperative approach.
- Despite its flexibility, the US maintains certain non-negotiable "red line" issues, though it is willing to adjust the wording for clarity without changing the fundamental requirements.
- Key issues like Regional Value Content (RVC) are on hold, and despite progress, Thai exporters still face risks and increased fees on certain products.
Thailand and the United States have commenced their first round of technical negotiations on trade tariffs, with a senior source from the Thai Ministry of Commerce revealing that the US has adopted a "flexible" and cooperative stance.
The discussions are highly detailed, involving multiple government agencies from both sides and focusing on the wording of more than one hundred articles.
The source, who spoke to Thansettakij, noted that the US appears to be trying to understand Thailand’s concerns and obstacles, working together to find solutions.
"The negotiations are expected to continue for several more rounds," the source said, highlighting that meetings are being held continuously with no fixed chairperson.
Instead, the head of the relevant Thai department takes the lead on each specific issue.
While the US has shown flexibility, it still has certain "red line" issues that it expects Thailand to comply with.
The source stated that the US is willing to adjust the phrasing of these points to ensure clarity and practical implementation without altering their fundamental substance.
One major issue, the Regional Value Content (RVC), has not yet been addressed. The US is holding off on negotiations because it plans to establish a single, standardised rule for all trading partners to simplify administration.
The US Customs and Border Protection will first finalise these internal rules before presenting them to its trading partners simultaneously.
Despite the positive start, the risks to Thailand's "at-risk" products have not disappeared. The risk has been reduced from an initial 36% to 19%, but exporters will still face increased fees.
This will likely push up final consumer prices in the US and could affect purchasing power, a challenge that all US trading partners are currently facing.
