Thailand Taking on US Tariffs

Many of these companies in Thailand have contracts with US automotive manufacturers. Their contract more likely than not are set on a fixed tariff with little room for expansion. They will be turning to the big three and also the Tier1s both of whom buy componentry, wire harnesses etc. under contracts. I can see both buyers giving some leeway to them rather than lose them and have to requalify another supplier. Qualification takes months and the end user has to approve whatever the Tiers 1s, etc. supply to them.

I am sure Trump’s name more likely than not can be found in some rather unusual places. This effort by him is really stupid and he is pouting over his lost demands. The tariffs do very little for the United States.

If product came back to the US? It would take months to tool up again and the costs would be high to take on such a task. Then there would be bebifits to pay labor which is typically picked up by the country of manufacture.

Good piece by the Bangkok Post and worth a read.

“‘Little reprieve’ for Thailand after US tariff ruling”

Bangkok Post

by Somhatai Mosika and Lamonphet Apisitniran

The issue of US tariffs is expected to intensify now that the US Supreme Court has struck down President Donald Trump’s use of an emergency powers law to impose them, Thai exporters and economists say.

The high court voted 6–3 on Friday to uphold a lower court decision that Mr Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose retaliatory tariffs was unconstitutional. Under the Constitution, it said, authority to levy tariffs is reserved for Congress.

The ruling applies only to the tariffs imposed under the IEEPA, which accounted for about half of all tariff revenue collected since new levies were imposed on dozens of US trading partners last year.

The US has imposed a 19% reciprocal tariff on Thai goods since August 2025, with ongoing negotiations aimed at reducing the rate. Thailand has proposed purchasing certain American products such as aircraft, weapons, energy and agricultural goods in return for a potential decrease in tariffs.

In response to the court’s decision, Mr Trump has announced a 10% global tariff (15% now) on imported foreign goods, in addition to the normal (non-IEEPA) tariffs already applied. This measure will take effect for 150 days starting on Tuesday, according to the White House.

The new baseline duty will be imposed under Section 122 of the Trade Act of 1974, which allows the president to impose tariffs unilaterally.

In addition to the flat 10% rate, Mr Trump said he would keep in place existing import taxes under Sections 301 and 232 of the trade law and to pursue more trade investigations.

Thailand’s Ministry of Commerce said on Saturday that it is closely monitoring developments in US trade policy following the court ruling. It has pledged to safeguard Thai businesses from potential fallout.

Commerce Minister Suphajee Suthumpun said Thailand is continuing its trade negotiations with the US to maintain stability in bilateral relations and reduce risks from policy volatility.

‘Not the end’

Dhanakorn Kasetrsuwan, chairman of the Thai National Shippers’ Council, said the Supreme Court ruling is a positive sign for the rule of law and may help reduce some business costs.

“The judgement reflects a fundamental principle of international trade, including the clarity of legal authority and the constitutional checks and balances within the US,” he told the Bangkok Post on Saturday.

“In the short term, this ruling may help reduce legal uncertainty and positively impact on import costs into the US.”

However, the council warned that Thai businesses should not view this as “the end” of trade protection measures, as the court only determined that the IEEPA does not grant the president the power to impose tariffs on such a scale.

The court did not provide guidance regarding refunds of duties that have already been collected, and the US administration can implement other laws to introduce new trade measures.

Mr Dhanakorn said the refund process may require further consideration by lower courts, which could be complicated and time-consuming.

“US trade policy remains highly uncertain, particularly as the administration continues to prioritise the protection of trade and local industries,” he said.

He advised exporters to monitor the US administration’s movements, assess cost risks and the implications of business contracts and diversify export markets to reduce excessive reliance on any single market.

He also urged them to prepare for possible alternative measures that may arise under other laws, such as Section 301, Section 232, or other national security-related mechanisms.

“Thai exporters should take this opportunity to review the strategies, enhance competitiveness, and manage risks, rather than seeing it as positive news,” Mr Dhanakorn warned.

Kobsak Pootrakool, chairman of the Federation of Thai Capital Market Organizations (Fetco), said Mr Trump made clear his intention to impose tariffs on imports in the US.

“Tariff collection will become stronger and better,” he said, emphasising that Mr Trump aims to generate more income from tariffs on imports and is developing a new system to make it happen.

Persistent worries

Thai exporters are facing renewed pressure as a fresh 10% global tariff on products shipped to the United States adds to existing trade barriers, according to Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI).

Although Supreme Court ruling has eased concerns over reciprocal tariffs, the new levy has sparked anxiety among entrepreneurs who fear mounting costs and shrinking competitiveness in the American market.

“Thailand must closely monitor these developments as several of its major exports are likely to be hit by the 10% levies,” Mr Kriengkrai said.

Industries already struggling with import duties now face the prospect of “tariff stacking”.

Key export categories such as hard-disk drives, integrated circuits, automobiles and auto parts — including tyres — could be subject to the new tax on top of existing anti-dumping duties.

Home appliances, particularly air conditioners and refrigerators, are also at risk, alongside luxury goods such as jewellery and accessories.

Solar panels, which have long been burdened with high tariffs, may see further increases, while steel and aluminium remain locked under a 50% tariff unaffected by the court’s ruling.

“There will be continuous challenges,” Mr Kriengkrai said, adding that while the legal decision has temporarily de-escalated tensions, significant uncertainty persists.

Another complication lies in how importers who paid duties last year will receive billions of dollars in refunds, and how businesses will manage the transition from high-cost inventory to lower market prices. The adjustment period, industry leaders warn, could be turbulent.

Meanwhile, the Trump administration appears determined to sustain revenue levels through new measures, raising concerns that Thai exporters may continue to face shifting trade policies, according to the FTI.

For many businesses, the path ahead remains fraught with unpredictability, underscoring the need for vigilance and strategic adaptation in Thailand’s export sector.