Commerce heads to US Aug 27-Sept 1 to conclude ART talks

Thailand will send a trade delegation to the United States from August 27 to September 1 in an attempt to conclude negotiations on an Agreement on Reciprocal Trade (ART), according to the Department of Foreign Trade (DFT).

DFT Director-General Arada Fuangtong said the negotiations were about 60% complete and that the Thai side had prepared detailed information to support its positions.

The department aims to conclude the agreement during the visit. Arada said holding the negotiations in person instead of online would give the delegation greater scope to explain Thailand’s position on outstanding issues.

The talks will take place amid uncertainty over a 12.5% US tariff on Thai imports linked to Washington’s concerns about restrictions on goods produced with forced labour, as well as the risk of further measures involving structural excess capacity.

DFT sees chance of forced-labour tariff being withdrawn

The United States imposed the additional 12.5% tariff on most Thai imports from July 24 under Section 301 of the Trade Act of 1974.

The action followed investigations into 60 economies that the Office of the United States Trade Representative (USTR) said had failed to impose or effectively enforce restrictions on imports made with forced labour.

The USTR’s final action set additional duties of either 10% or 12.5%, with Thailand placed in the higher-rate group.

Arada said the DFT believed the forced-labour measure might ultimately be withdrawn because it was being challenged in the US Court of International Trade.

A coalition of 25 Democratic-led US states has asked the court to halt the tariffs, declare them unlawful and order refunds of duties already collected. The lawsuit challenges measures imposed on goods from 60 trading partners at rates of 10% or 12.5%, according to Reuters.

“We expect that the forced-labour tariff may not be enforceable and could eventually be withdrawn,” Arada said, stressing that this was the department’s assessment of the legal challenge.

The litigation has not yet resulted in a ruling invalidating the Section 301 duties.

Arada compared the challenge with earlier litigation against US tariffs imposed under the International Emergency Economic Powers Act. Those measures were struck down after US courts found that the law did not authorise the president to impose tariffs.

She also questioned whether the forced-labour investigations, conducted over a period of about two months, had adequately reflected substantial differences among the markets examined.

Despite those differences, most affected economies were assigned rates of either 10% or 12.5%. Arada said the US authorities would need to explain the criteria used to determine the rates.

Excess-capacity action remains a concern

Arada said Thailand faced a greater risk of US action over alleged structural excess capacity.

She cited a White House report published on August 13 entitled The Great Transshipment Scam, which identified more than 40 countries as presenting heightened risks of illegal transshipment involving China-linked goods.

The White House report placed Thailand in Tier 2 alongside Brazil, Indonesia, Malaysia, Turkey and Vietnam.

It described the group as economies with significant trade volumes and close integration with China-linked supply chains, manufacturing platforms, input sourcing and logistics systems.

The report did not establish that all redirected trade was illegal. It acknowledged that some changes reflected legitimate shifts in production, investment and sourcing, while calling for further investigation into possible tariff evasion and false country-of-origin claims.

Arada said the White House’s publication of the report had increased Thailand’s concern that Washington could proceed with further trade measures.

If the United States imposes an additional tariff linked to structural excess capacity, the DFT estimates that the combined rate under the forced-labour and excess-capacity measures should not exceed 19–20%.

The figure is the department’s assessment and has not been confirmed by the US authorities.