U.S. Tariff Talks Stall, Leaving Thai Exporters Racing to New Markets

Thai exporters hoping for a quick reprieve from Washington’s 19% import levy are still waiting. Behind closed doors, negotiators from Bangkok and the U.S. Trade Representative keep trading technical papers, but the headline rate—slashed from an early threat of 36%—hasn’t budged. Officials insist the talks are on track, yet analysts warn that every additional month of delay chips away at Thailand’s competitive edge in its single biggest market.

Flash Points Now on the Table

• Framework for an Agreement on Reciprocal Trade announced in October puts 99% of U.S. goods on a path to zero duty in Thailand, while American tariffs on Thai products stay at 19%.

• Washington’s priority: tougher local-content verification to block trans‐shipped Chinese parts.

• Bangkok’s non-negotiable: preserve public-health rules on pork containing growth promoters.

• Both sides eye carve-outs that could trim duties on a small list of strategic items before a full deal is ratified.

What Has Been Agreed—And What Remains Stuck

The two delegations have reportedly finished drafting schedules for services, digital trade and investment protections. Where they remain far apart is market access for agricultural products. U.S. officials link progress to Thailand’s stance on sanitary and phytosanitary rules, while the Thai side says any change must survive domestic food-safety laws that ban substances such as ractopamine.

For Thai businesses, the clock is ticking. Customs data show exports to the U.S. reached $40.26 B in the first half of 2025, up almost 30 %, as companies raced to ship orders before any fresh tax shock. Economists now forecast a sharp slowdown in the second half because the temporary surge cannot be repeated if tariffs stay high.

Winners and Losers Among Thai Exporters

Heavy-weight sectors shoulder most of the cost:

Electronics & electrical appliances — $23 B in 2024 sales to the U.S.; semiconductors, smartphones and air-conditioners top the list.

Rubber tyres — $3.5 B, with profit margins thinning as importers push for price cuts equal to the duty.

Automotive parts — $1.4 B; global carmakers are already scouting alternate suppliers in Mexico and Vietnam.

Jewellery and medical devices feel the pinch but can pass on some costs because of product differentiation.

Conversely, niche categories like canned seafood and specialty rice still enjoy healthy demand, helped by brand loyalty and limited substitutes.

Non-Tariff Friction: The Never-Ending Pork Story

The most politically sensitive sticking point remains the U.S. request that Thailand admit pork raised with beta-agonists. Bangkok banned the additive two decades ago citing consumer health. Accepting Washington’s demand, say local farm groups, would jeopardise a domestic industry valued at ฿112 B and tarnish Thailand’s “zero-tolerance” food-safety brand in Europe, China and Japan. The Department of Livestock Development is mapping out a counter-proposal that keeps the ban but offers wider access for other U.S. meats.

Political Clocks on Both Sides

Thailand’s caretaker cabinet cannot sign any treaty; final approval will have to wait for the next elected government and a parliamentary vote. Across the Pacific, an election year looms as well, making it risky for the White House to be seen giving tariff concessions without visible wins on supply-chain security. Diplomatic sources say this twin-timing problem is why negotiators are aiming for a narrow “early harvest” package by Q1-2026, leaving thornier dossiers for later.

What Economists Recommend

Independent analysts advocate a three-pronged strategy:

– Accelerate the talks by setting up a minister-level “war room” to cut through bureaucratic overlap.– Offer targeted U.S. import boosts—think LNG, aircraft and high-tech equipment—instead of sweeping duty cuts that could hurt Thai farmers.– Strengthen rules-of-origin enforcement to defuse accusations that Chinese goods are routed through Thailand.

If stalemate persists, the IMF projects Thai GDP growth could slip to 1.8 % in 2025, with the World Bank pencilling in 1.6 %.

Diversifying Away From Reliance on One Market

The Commerce Ministry has quietly revived trade-promotion plans in India, the Middle East and Eastern Europe while fast-tracking talks for a Digital Economy pact with the EU. Exporters of solar panels and medical gloves already report double-digit sales growth to Brazil and Saudi Arabia. Officials stress that such diversification is an insurance policy, not an exit from the U.S. market.

The Road Ahead

Negotiators return to the table next month with fresh legal text on local content and a shortlist of Thai products—rumoured to include solar modules and coffee beans—that could see tariffs fall to 0 % as a confidence-building step. For manufacturers along Thailand’s Eastern Economic Corridor, that sliver of hope is enough reason to keep expansion plans on hold but not yet cancel them. As one electronics exporter put it: “We’re not betting against America, just bracing for a longer game.”