Thai Exports to US Face 12.5% Tariff Hurdle in Second Half of 2026

 

 

Rising demand for AI and electronics is expected to offset new US Section 301 tariffs on rubber and food, keeping growth above 20 per cent.

 

 

Thailand’s exports to the United States expanded by a remarkable 44.3 per cent in the first six months of 2026. However, the Ministry of Commerce has cautioned that shipments to the US market face heightened uncertainty in the second half of the year due to new American trade measures and revised import tariffs.

 

According to official figures, total Thai export value to the US reached $196.741 billion during the first half of 2026, marking a 41.1 per cent year-on-year increase. The US maintained its position as Thailand’s largest export market, accounting for 24 per cent of total global shipments.

 

Over the same period from January to June 2026, Thailand recorded a continued trade surplus with the US totalling $33.038 billion.
 

 

 

New US Tariffs Hit Rubber and Processed Food

Nantapong Jiralerspong, director-general of the Trade Policy and Strategy Office (TPSO), provided an assessment of the US Section 301 tariff measures, under which Thailand has been placed in a category subject to a 12.5 per cent tariff rate:

 

Electronics: Accounting for 50 per cent of total Thai exports to the US, key electronic lines remain on the exemption list due to strong American demand for technology.

 

Vulnerable Sectors: Rubber products and specific processed food lines face potential risks from the new duties.

 

Nantapong noted that Thailand may face a slight competitive disadvantage against regional rivals such as Malaysia and Indonesia, which face tariff rates under 10 per cent.

 

Addressing concerns over industrial excess capacity, the Ministry of Commerce reaffirmed that Thailand maintains no market-distorting subsidy policies and is currently negotiating within the Agreement on Reciprocal Trade (ART) framework to finalise future rates.

 

Automobiles, automotive components, and machinery remain under close surveillance.
 

 

 

 

Second-Half Growth Expected to Moderating to 20 Per Cent

Visit Limlurcha, vice chairman of the Thai Chamber of Commerce and chairman of the Processed Food and Future Food Strategic Committee, told Krungthep Turakij that while second-half export expansion will likely moderate from the first-half surge of over 40 per cent, growth should comfortably exceed 20 per cent.

 

Visit highlighted that sustained global demand for electronics and artificial intelligence (AI) technology will remain the primary driver underpinning Thai export performance through the remainder of the year.

 

He added that despite the implementation of Section 301 tariffs, the competitiveness of Thai goods remains intact, as the tariff differential between Thailand and regional competitors stands at a manageable 2.5 percentage points.

 

 

Supply Chain Traceability and Section 301 Risks

The direct impact of Section 301 measures is expected to be limited, as the majority of Thailand's core export lines to the US fall outside the taxable product schedule.

However, products relying on imported raw materials from nations under US scrutiny face heightened risks in the second half. Exporters who can demonstrate that processing takes place in Thailand—adding sufficient domestic value and using an appropriate proportion of local materials or labour—will retain their competitive edge.

 

Conversely, goods relying almost entirely on foreign raw materials without verifiable local origin or value addition face intensive audits and potential duties.

 

Visit urged Thai exporters targeting the US market to immediately enhance raw material traceability across their supply chains and strictly adhere to host-nation regulations.

 

Given that several competing nations benefiting from a 2.5 per cent tariff advantage enforce strict prohibitions on imports linked to forced labour, transparent supply chain documentation confirming no connection to forced labour will be critical to safeguarding Thailand’s long-term market access.

 

 

Ongoing Reciprocal Trade Negotiations

A critical issue requiring close monitoring is the ongoing negotiation under the Agreement on Reciprocal Trade (ART) framework. Washington continues to express concern over the high volume of Thai exports entering the US market and is prioritising checks against fraudulent origin rules and raw material sourcing.

 

While ART discussions touch upon labour standards, Thailand has met required benchmarks. US authorities are primarily focused on verifying whether Thai exports incorporate raw materials sourced from countries accused of using forced labour—and to what proportion—rather than simple repacking and re-export operations.

 

Establishing transparent supply chain oversight and clear verification systems will be essential to building buyer confidence and insulating Thai trade from future policy shocks.

 

Source: Krunthep Turakij