Thailand continues US tariff talks despite caretaker government, eyes new Cabinet approval

Thailand’s trade negotiation team is pressing ahead with discussions on US tariffs, with the Ministry of Commerce acting as the lead agency, despite the current caretaker government status. Key issues include Local Content requirements and import quotas, with proposals set to be submitted to the new Cabinet for approval before being forwarded to Parliament.

Political changes in Thailand have impacted government economic policies. While a 19% US import tariff rate has been agreed, Thai and US negotiators still need to work through detailed arrangements. The previous Cabinet approved a joint statement between Thailand and the US reflecting the agreed 19% tariff, but the new Cabinet must finalise the details, including:

1. Regional Value Content (RVC) / Local Content: The US has proposed 50%, while Thailand has suggested 40%, in line with other trade agreements. Thailand seeks to negotiate a lower proportion to benefit domestic businesses.

2. Import quotas: Thailand plans to grant US exporters tariff exemptions on over 10,000 products. Certain items, such as animal feed corn, may require that locally sourced Thai corn is used first, with conditions still under negotiation.

A government source explained: “The Thai team and USTR are discussing the details as normal. As a caretaker government, work must continue, but issues requiring Cabinet approval and Parliament submission must wait for a full-authority Cabinet. All information has been fully prepared.”

Impact of 19% tariff

The source added that a US appellate court ruling on the limits of presidential tariff authority may ultimately suspend retaliatory measures, though clarity from the US Supreme Court could take several months. Meanwhile, the 19% tariff is already in effect.

Thai exporters have been subject to the 19% US import tariff since August 1, 2025, with continued impact for several months until a new court ruling. US President Donald Trump retains the option to apply tariffs on individual products if the Supreme Court rules against him, a practice previously applied to certain countries.

Pichai says US tariffs won’t affect Thailand’s competitiveness

Deputy Prime Minister and Finance Minister Pichai Chunhavajira commented on the recent US appellate court ruling on Trump-era retaliatory tariffs, saying that Thailand’s position would remain largely unchanged regardless of the outcome.

“If the ruling confirms the tariffs are lawful, Thailand will continue negotiations with the US as planned. Everyone’s status remains the same. If the ruling finds the tariffs unlawful, the US tariff rates will be applied equally to all countries, which will not affect Thailand’s competitiveness, as we do not compete with the US but with other exporting nations,” he explained.

Pichai added, “Whether Trump wins or not, the tariffs for all countries will be applied uniformly. I believe global trade mechanisms will continue to operate in this way.”

Regarding Thailand’s trade surplus with the US, Pichai noted that most of the exported products are not produced in large volumes domestically, so there should be no major issues if Thailand manages the situation correctly.

Commerce Ministry continues technical-level talks

Deputy Commerce Minister Chantawit Tantasith said that technical-level talks on the Trump tariffs can proceed while awaiting policy-level decisions from the new Cabinet. The negotiations are being led by the Department of International Trade Negotiations in coordination with other relevant agencies.

“There are no issues with technical-level discussions. The 19% rate has already been agreed at the policy level. During this period, we still have ample time to review the details before the new Cabinet takes over policy-level decisions,” Chantawit said.

Private sector outlines three Trump tariff scenarios

Visit Limluecha, Vice Chairman of the Thai Chamber of Commerce and President of the Thai Future Food Trade Association, said that following the US appellate court ruling that most of Trump’s tariffs on foreign imports were “unlawful” for exceeding legal authority, Trump has the right to appeal to the US Supreme Court by October 14. A Supreme Court decision is expected by the end of this year. As such, the future of the Trump tariffs remains uncertain, with three possible scenarios:

1. Supreme Court upholds lower courts – The US would have to refund tariffs previously collected to the importers who filed the lawsuit, though the process may continue as other importers could file claims for refunds.

2. Supreme Court rules Trump’s tariffs lawful – This would legitimise the tariffs and allow Trump to continue collecting them, potentially even more aggressively.

3. Tariffs cannot be applied on a per-country basis – The US could impose tariffs on individual products instead, using other legal mechanisms. Globally, different products, such as automotive parts, could be targeted. These would likely focus on products that the US aims to produce domestically and for which it has sufficient production capacity.

“Uncertainty is inherent. What Thailand can do is continue with the process for now. We expect clarity on the Trump tariffs by year-end, and in the meantime, Thailand is negotiating the details,” Visit said.

He added that if the US Supreme Court eventually rules Trump’s tariffs unlawful, Thailand can still benefit by applying detailed tariff considerations—such as rules of origin, product exclusions, intellectual property rights, and traceability—in negotiations with other trading partners like the European Union, helping Thai exporters adapt and enhance competitiveness.

Thanakorn Kasetsuwan, president of the Thai National Shippers' Council, said Thailand is continuing technical-level negotiations on the Trump tariffs. Since the 19% tariff deal has already been agreed, remaining discussions are mainly procedural. He added that having a caretaker government is unlikely to affect the US tariff deal, as relevant agencies are continuing work while waiting for the new Cabinet to handle policy-level decisions.