Thai exports face US Section 301 risk over forced-labour concerns
Thai businesses are concerned about possible US trade measures, although no final decision has been announced on a reported 12.5% tariff.
- The United States is considering imposing trade measures on Thailand under Section 301 of the Trade Act of 1974 due to concerns over forced labor in its supply chains.
- The investigation primarily targets Thailand's fishing and seafood industries, which have faced previous scrutiny over labor practices.
- A potential 12.5% tariff on Thai goods is under consideration, which would harm Thailand's competitiveness in the US, its largest export market.
- The Thai government is actively negotiating with the US to demonstrate its efforts in combating forced labor through improved legislation and supply-chain oversight to avoid the tariffs.
The United States is again emerging as a major challenge for Thailand’s export sector amid moves to consider trade measures against Thai goods under Section 301 of the Trade Act of 1974.
Concerns over forced labour in supply chains, particularly in the fishing industry, are among the main issues being raised.
The situation has caused concern among Thai businesses because the US is Thailand’s largest export market and plays an important role for a wide range of goods, from food and processed agricultural products to electronics, electrical appliances, vehicles and parts, and other industrial products.
However, the Office of the United States Trade Representative (USTR) has yet to issue a final announcement confirming either an additional 12.5% tariff on Thai goods or its implementation on July 24, as suggested by some information that has been circulated.
The proposed rate remains under consideration and negotiation.
Forced-labour concerns put Thai-US trade under pressure
Section 301 is a US trade instrument that authorises the government to take retaliatory measures against trading partners if it considers their policies, regulations, or practices to be affecting US economic interests.
The US has previously used the measure against several countries, including China, over intellectual property and technology transfer, and as a mechanism to pressure trading partners to improve trade rules.
In Thailand’s case, the central issue does not centre solely on the trade deficit, but is also linked to labour standards and the transparency of product supply chains, particularly US concerns about preventing forced labour in fishing and related industries.
Thailand has previously faced scrutiny over illegal labour in the fishing sector, prompting the government to accelerate improvements to oversight, including worker registration, fishing-vessel inspections, product traceability and labour-protection measures.
Although Thailand has made progress, the US continues to focus on practical results, particularly the ability to prove that goods entering its market are not linked to forced labour.
Scrutiny extends beyond fishing to forced-labour imports
US pressure does not arise only from labour problems in the fishing sector, but is also linked to its approach to controlling imports of goods at risk of being associated with forced labour.
The US applies strict measures to block goods linked to forced labour through laws and mechanisms administered by U.S. Customs and Border Protection (CBP), requiring US importers to demonstrate the origin of goods and the transparency of their supply chains.
This has prompted many exporting countries to accelerate the development of traceability systems and labour standards to reduce trade risks.
For Thailand, the product groups at greatest risk if the US proceeds are seafood, processed fishery products and goods connected to fisheries supply chains.
They are directly linked to concerns about forced labour in domestic industries and raw-material supply chains, as well as imported goods used for production and export to the US.
Thailand’s position in this area remains unclear, and it has no law banning imports from sources that use forced labour, an important reason it has come under US scrutiny.
Other products, such as electronics, vehicles, parts and electrical appliances, are also major Thai exports, but there is currently no confirmed information that they would fall within the scope of the measure.
12.5% tariff not final as Thailand steps up negotiations
The proposed 12.5% tariff is being closely watched by the market because, if imposed, it would raise costs and make it harder for Thai exporters to compete in the US market.
However, the Section 301 process allows trading partners to present information and negotiate before the US announces final measures.
The tariff rate, product list and implementation timetable, therefore, remain subject to USTR’s consideration.
The Thai government has recently stepped up coordination among relevant bodies, including the Ministry of Commerce, the Ministry of Labour, the Ministry of Agriculture and Cooperatives, and the private sector, to prepare explanatory information for the US.
Thailand’s main objective is to show that it is seriously addressing forced labour through legislation, inspections and supply-chain oversight.
Thailand’s private sector has meanwhile urged the government to communicate evidence-based information to the US to show that many Thai businesses have already adapted to international standards.
Higher tariffs could put Thailand at a disadvantage
The Section 301 risk is being closely watched because the US is Thailand’s largest export market.
In the first five months of 2026, Thai exports to the US continued to expand, and the country remained a key market for many Thai products.
If Thailand faces an additional 12.5% tariff, exporters could encounter higher costs and limited options: either cut profit margins to retain the market or raise prices, potentially putting them at a disadvantage to competitors facing lower tariffs or production costs.
Compared with regional competitors such as Vietnam, Indonesia, Malaysia and India, Thai producers could lose US buyers to alternative sources if those countries are not subject to tariffs at the same level.
Thailand nevertheless retains strengths in its solid production base, the confidence of trading partners and its capacity to produce high-value-added goods.
The key challenge is therefore not only to negotiate the avoidance of tariffs in the short term, but to raise production standards across the entire system.
The government must accelerate the development of product-traceability systems, improve labour standards and help SMEs adapt.
The private sector, meanwhile, must accelerate market diversification, reduce dependence on a single market and develop products that compete on quality rather than price.
This Section 301 case shows that competition in modern global trade is no longer based solely on cost, but also on “standards”, which will determine the long-term competitiveness of Thai products.
