Thailand faces a critical 72-hour deadline as the US prepares to impose tariffs on its exports. With Vietnam securing a 20% rate, Thailand risks higher tariffs that could devastate its economy, deepen trade deficits and push it closer to China’s shadow and global isolation.
Thailand is staring down a potential economic blow from Washington, D.C. In the next 72 hours, the U.S. is expected to reveal the tariff rate it will slap on Thai exports — and the stakes couldn’t be higher. The magic number is 20% — the rate Vietnam locked in by moving fast and negotiating hard. Their government acted decisively. Thailand, by contrast, stalled, hesitated and let precious time slip away. Now, the clock is nearly out. If Thailand ends up with a tariff above 20%, it won’t just sting — it will deepen the crisis already hammering the economy. This isn’t just about trade. It’s about Thailand’s future. While Vietnam and Indonesia push forward as rising powers, Thailand risks sliding backwards — locked in China’s shadow, isolated from the West and losing its place on the global stage.
Thailand is racing to finalise a trade deal with the United States before new tariffs take effect on July 9. President Donald Trump confirmed on Saturday that official letters would be sent to over 170 countries. Twelve countries will have letters dispatched on Monday. These letters will notify them of unilateral tariff rates under a new US trade policy.
Importantly, Thailand may be among the affected countries. The urgency follows failed talks in Washington last Thursday between Thai officials and US Trade Representative Jamieson L. Greer. Finance Minister Pichai Chunhavajira, who led the delegation, initially signalled concern.
However, on Sunday, he tried to calm public fears by insisting the outcome remains open.
Pichai denies a 36% tariff threat but confirms talks are ongoing with new proposals before July 9
Significantly, he denied reports that Thailand faces a tariff rate of up to 36%. Instead, he emphasised that no final figure had been confirmed. According to Pichai, talks remain ongoing and confidential. He also said that Thailand would submit a revised proposal before the July 9 deadline.
Previously, an 18% tariff rate had been considered a working assumption by Thai officials. That figure, however, now seems less certain. Meanwhile, Vietnam has already reached a deal with the US for a 20% rate. As a result, this has become a regional benchmark. Thai negotiators now hope to secure a rate not exceeding that threshold.
Nevertheless, US sources maintain that no extension will be granted beyond July 9. While implementation may be delayed until July 30, the decisions will be legally binding from the earlier date. In this context, Thailand has only days left to avoid a costly outcome.
The stakes could not be higher. The United States is Thailand’s most valuable export market. In 2024, Thailand recorded a $45.6 billion trade surplus with the US. By contrast, it posted a $45.36 billion deficit with China during the same period.
Rising trade deficits with China show Thailand’s dependence on exports and supply chains is worsening
Since 2013, Thailand’s trade imbalance with China has ballooned. What was once a $10.5 billion deficit has now quadrupled. Economists say this reflects a structural weakness. Essentially, Thailand acts as a manufacturing hub feeding US-bound exports. However, its dependency on Chinese supply chains leaves it vulnerable.
If the US imposes steep tariffs, Thailand’s export sector could collapse. Not only would exports to the US shrink, but investors may also flee. According to analysts, an unfavourable deal could brand Thailand as a high-risk destination. This would hurt long-term competitiveness.
The Thai Chamber of Commerce has already sounded alarms. It warned that delays in negotiations are dragging down business confidence. Meanwhile, the Federation of Thai Industries urged the government to act decisively. Private-sector leaders now fear a repeat of past crises.
Currently, Thailand is facing what economists are calling a “perfect storm.” First, tourism is underperforming. Foreign arrivals are down 4% from 2024 levels. Chinese tourists, in particular, are staying away. Concerns over image and safety have weighed heavily.
Exports and investment decline as manufacturing relocates and credit access dries up for Thai firms
Second, exports, while up until May, have begun falling. Prospects from July to the end of 2025 appear bleak. Manufacturing competitiveness has fallen, with firms relocating to Vietnam and Indonesia. Sectors like electronics, petrochemicals, steel, textiles, and autos have been hit hard. Thai factories are losing ground as supply chains shift.
Third, private investment is contracting. Lending from commercial banks has dropped sharply. SMEs and consumers face tighter credit. Banks fear rising defaults and are restricting loans. Consequently, businesses lack working capital.
Moreover, public debt is threatening to reach the 70% of GDP ceiling set by law. This adds further pressure on investor confidence. As domestic risks grow, financial experts advise diversifying abroad. KKP Research recommends a “selective, not passive” strategy. That means choosing resilient sectors like healthcare and tech.
The National Economic and Social Development Council (NESDC) expects to revise Thailand’s GDP forecast soon. Its current projection of 1.3% to 2.3% is based on an assumed tariff rate of 18%. Should the rate climb higher, the GDP outlook will deteriorate further.
Thailand scrambles to finalise new US proposal amid fears of tariffs as high as 70% on some exports
Last week, the World Bank predicted 1.8% growth in 2025 with only 1.7% for 2026.
On Sunday, Pichai said that ongoing discussions remain confidential. He stressed that Thailand’s revised proposal is being finalised with input from multiple ministries. These include Commerce, Industry, Foreign Affairs, Agriculture, Public Health, and the Board of Investment.
He also said that the US remains open to a compromise. According to Pichai, this is a positive sign. He believes both countries are working toward a win-win outcome. Yet time is running out fast.
If Thailand fails to reach an agreement, it could face tariffs of up to 70%. These are levels rarely seen in modern trade relations. In such a scenario, Thai goods would become uncompetitive in the US market overnight.
Additionally, the image of Thailand as a reliable trade partner would suffer. The kingdom might appear more closely tied to China’s economic orbit. In a world increasingly divided into rival trade blocs, this could further isolate Thailand from the West.
As Vietnam rises, Thailand risks global isolation and long-term economic decline without bold action
Analysts now see this moment as pivotal. Thailand could fall behind regional peers like Vietnam and Indonesia. Without bold action, soon, it may no longer hold its place as Southeast Asia’s second-largest economy.
Indeed, public frustration is mounting. Critics say Vietnam moved swiftly and decisively, while Thailand hesitated. Despite weeks of talks, the Thai team has failed to close a deal.
Pichai insists that all negotiations are focused on national interest. He argues that the agreement must be sustainable and mutually beneficial. However, many observers worry the government may have misjudged the urgency.
Furthermore, there are concerns that the US may restrict exports of AI chips and advanced technologies to Thailand. Washington fears that China may use loopholes in Southeast Asia to acquire sensitive tech. Such restrictions would limit Thailand’s innovation potential.
Meanwhile, EXIM Bank and the Department of International Trade Promotion are working to help Thai exporters find new markets. These efforts aim to cushion the impact of lost US access. However, this will take time and cannot replace the American market overnight.
Emergency economic measures launched as GDP faces pressure and no final tariff rate has been secured
To stimulate the economy, the Treasury has directed GH Bank to issue new loans. Over ฿150 billion will be injected into the system. This measure seeks to boost employment and stimulate business growth. Yet structural problems remain unresolved.
The NESDC is now preparing several economic scenarios. If Thailand can secure a low tariff rate, GDP might hold steady. If not, sharp contractions in trade and investment are likely.
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Right now, the situation is highly fluid. The next 72 hours will determine Thailand’s economic path for years. A successful deal may stabilise the economy. Failure could trigger lasting damage.
As Pichai noted, the government aims to keep Thailand competitive on the global stage. But optimism is fading. Without concrete results, the country risks drifting further into uncertainty. In short, the time for decisions is now.
