Bangkok Seeks Urgent US Trade Deal to Resolve Tariff Dispute

 

Negotiators target a bilateral deal by year-end to finalise new RVC trade rules and combat fraud, while data shows export slowdown across ASEAN.

 

Thailand is set to use the upcoming ASEAN Summit as a key platform for bilateral negotiations with the US, aiming to finalise crucial details on retaliatory tariffs and the new Regional Value Content (RVC) rule by the end of the year.

 

The main issue driving the negotiations is the need to set a specific RVC ratio to prevent the fraudulent acquisition of product origin, or 'transshipment,' by goods from third countries—a major concern for the US.

 

The push for a quick resolution comes after the US announced a 19% increase in retaliatory tariffs on Thai imports, with an even steeper 40% tariff applied to goods suspected of transshipment.

 

 

 

Summit Talks to Finalise the Agreement

Suphajee Suthumpun, Thailand's Commerce Minister, confirmed that during the ASEAN Summit in Kuala Lumpur, Malaysia, from 26–28 October 2025, Thai officials will hold bilateral discussions with US representatives.

 

The talks will cover the 19% tariff and the fine print to be included in the Thailand-US Counter-Tariff Agreement. 

 

Suphajee stated that any mutually beneficial points could be agreed upon immediately, leaving the complex technical details to be finalised by the technical committee, which reports to the Strategic Trade Negotiation Working Committee chaired by Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas.
 

 

 

"Our technical working group has continuously discussed and consolidated details quite extensively... We will negotiate with the US to conclude the talks quickly, in line with both parties’ intention to finalise by the end of this year," Suphumpun said.

 

Any agreed-upon deal will then be submitted to the Thai Cabinet and Parliament for approval before it can be formally signed.

 

 

 

The Complexities of the New RVC Rule

Arada Fuangtong, Director-General of the Department of Foreign Trade (DFT), confirmed with Krunthep Turakij that if the negotiations are successful, the US will likely adopt the RVC criteria to determine product origin, moving away from relying solely on manufacturing processes or changes in customs codes.

 

The RVC is calculated based on the percentage ratio of domestic versus foreign raw materials used. While the general ASEAN rule requires that not less than 40% of the product's value must originate within ASEAN, the US requirement for Thai exports, with which Thailand lacks an FTA, is expected to be higher, possibly exceeding 50%.

 

Specific details on the calculation formula are anticipated to be clarified in November.

 

Crucially, an important incentive has been offered to mitigate the 19% retaliatory tariff: if US-origin raw materials make up more than 20% of a product's value, the tariff will only be applied to the non-US portion of the raw materials. This encourages Thai exporters to increase their sourcing from the US to lower their tariff exposure.
 

 

 

DFT to Tighten C/O Controls

To allay persistent US concerns over fraud, the DFT is planning a significant change to its export process.

 

Arada stated that the DFT intends to become the sole issuing agency for Certificates of Origin (C/O) for US exports, centralising a task currently handled by three different agencies. This is intended to eliminate ambiguity and build confidence with the US.

 

Furthermore, the DFT will drastically increase scrutiny: every shipment of the 49 monitored items destined for the US will have to undergo an origin verification check with the department before a C/O is issued.

 

The urgency of the trade talks is underpinned by cooling regional trade data.

 

A report from the Thai Ministry of Commerce cited data from logistics software firm Descarts, showing that US container imports overall fell by 8.4% in September 2025 compared to the previous year.

 

Imports from China saw a sharp drop of 22.9%. While imports from ASEAN (Indonesia, Thailand, and Vietnam) and South Asia (India) have increased, the monthly import volume from nearly all ASEAN countries is slowing down.

 

The Thai Trade Office in Chicago commented that while China is losing US market share to new supply chain destinations in ASEAN and South Asia, the deceleration across most ASEAN exports is a sign of market fragility.

 

Factors include uncertain orders, volatile freight costs, a weaker global economy, and rising geopolitical tensions. Exporters are being advised to diversify their production bases and increase reliance on domestic production to mitigate risks.