Thailand’s negotiation team has received a sliver of hope in a high-stakes trade impasse with Washington, as the U.S. administration pushes back the effective date for sweeping new tariffs.
Treasury Secretary Scott Bessent announced an effective date of the U.S. reciprocal tariff—possibly giving trading partners, including Thailand, until August 1, 2025, to finalize agreements before facing 36% duties on Thai exports.
Previously, the grace period was set to expire on July 9, turning up the heat on Thai officials scrambling to address U.S. demands. Finance Minister Pichai Chunhavajira signaled in talks with Bloomberg News that prior Thai proposals—ranging from increased American market access across agriculture and industrial sectors to major purchases of energy and Boeing aircraft—have yet to satisfy U.S. negotiators.
At stake is Thailand’s $46 billion trade surplus with the U.S.; Bangkok has already committed to cutting this imbalance by 70% in just five years and seeking overall trade parity within eight, with offers of broad tariff elimination and robust American imports. Yet Washington has stood firm, prompting Thailand to prepare a more ambitious incentive package, including further tariff reductions and expanded U.S. imports.
The extension announced by U.S. Treasury Secretary Bessent offers both a reprieve and a strategic window: While July 9 remains the deadline for proposals, tariffs will not take effect until August 1. This effectively grants an extra three weeks for round-the-clock negotiations to hammer out a deal acceptable to both sides.
“The goal is still mutual benefit,” Finance Minister Pichai emphasized, underscoring the urgency as Thailand faces pressure to match or exceed deals recently struck by neighbors like Vietnam, which succeeded in capping some tariffs at 20%.
Failure to reach an agreement could deliver a sharp blow to Thailand’s export-driven economy—economists warn GDP growth could slip by almost a percentage point if punitive tariffs are imposed. With the clock now reset, Thai negotiators have a fleeting opportunity to bridge remaining differences, safeguard market access, and steer clear of what could become a severe economic storm.
