SCB EIC estimates that Thailand’s economy in 2025 will continue to grow at a similar pace to its previous forecast of 1.5%, even if Thailand manages to partially negotiate a reduction in retaliatory tariffs with the U.S. by August 1.
However, Thailand’s tariff rates remain higher than those of key competitors, partly due to front-loading of exports before the U.S. begins imposing higher import tariffs. In the second half of the year, exports are expected to be hit harder as Thailand’s reciprocal tariffs could exceed those of its rivals in the U.S. market. Currently, U.S. tariff barriers on specific products have already begun to negatively impact trade partners that focus on exporting goods subject to specific tariffs.
Thailand’s economic growth in 2026 is projected to slow significantly to just 1.2%, due to a sharper contraction in exports and private sector investment stemming from the ongoing impact of U.S. tariff barriers.
Key Thai export products face the risk of losing market share in the U.S. to competitors subject to lower retaliatory tariffs — particularly in electronics and electrical appliances, which are likely to lose ground to ASEAN countries, Japan, and South Korea. Additionally, Thailand may be exposed to the risk of being targeted for tariffs on transshipped goods, similar to Vietnam, further raising trade costs. Thai exports with high import content may also face stricter U.S. origin verification measures, adding another layer of pressure.