Thailand will engage in tariff negotiations with the United States, Prime Minister Paetongtarn Shinawatra announced on Thursday, shortly after US President Donald Trump revealed significant tariffs on US imports.
“We won’t allow this situation to lead to a missed GDP target,” Ms. Paetongtarn stated.
According to InnovestX Securities, the reciprocal tariffs could potentially reduce Thailand’s GDP by as much as 1.2 percentage points from an anticipated growth rate of 2.5%, and the Bank of Thailand’s single projected interest rate cut may have minimal impact on the economy.
Thailand is included on the “Dirty 15” list of countries that could be adversely affected by Trump’s tariffs. Currently, the average US tariff on Thai imports stands at 2%, while Thailand imposes an average tariff of 8% on American goods.
On the same day, Southeast Asian currencies and stock markets experienced declines after emerging Asian nations faced some of the highest tariff increases from President Trump. The Thai baht weakened by as much as 0.8% against the US dollar, with the Malaysian ringgit and South Korean won also experiencing losses.
Singapore’s main stock index fell by as much as 1.3% before recovering slightly, while Malaysia’s index dropped by 0.7%. Overall, Southeast Asian equities have already been among the poorest performing markets globally this year.
According to analysts Padhraic Garvey and Francesco Pesole from ING Bank, Asian emerging markets are the most adversely affected by this tariff announcement. They noted that a general shift towards reduced market rates is anticipated amid global risk aversion.
Southeast Asia was particularly hard-hit by the reciprocal tariffs announced by Trump on Wednesday, with Vietnam’s exports facing a 46% levy increase, Thailand’s by 36%, and Indonesia’s by 32%. The region’s largest trading partner, China, has been heavily impacted, now facing a cumulative tariff rate of 54%.
Investors are now closely monitoring any potential retaliatory measures from affected countries, which could escalate global trade tensions further. While Australia has publicly excluded the possibility of retaliation, the response from economies such as China remains a focal point of attention.
