Bangkok: The Federation of Thai Industries (FTI) has proposed that the Thai team negotiate a two-tiered tariff system with the United States under the Trump administration’s trade policies. The proposal suggests a 40% tariff rate for goods that Thailand uses as a transit point and a 20% tariff rate for American goods manufactured in Thailand and products made in Thailand. The FTI opposes the complete removal of import tariffs from the United States.

According to Thai News Agency, Mr. Wiwat Hemmondharop, Vice Chairman of the Federation of Thai Industries, expressed concerns over the current 36% Reciprocal Tariff, stating that it significantly impacts Thai industries, particularly in steel, aluminum, clothing, and furniture sectors. He warned that exports might decelerate in the latter half of the year due to the United States accelerating its import activities. Additionally, the manufacturing sector in Thailand faces challenges due to issues like the China Flooding.

The FTI’s proposal includes negotiating a two-level tariff system with the United States. The organization suggests a reduction in tariffs for goods produced in Thailand, such as those by American companies like Western Digital, as well as agricultural products made in Thailand. These goods should have a tariff rate lower than 36%, potentially around 20% or 25%. Conversely, products that use Thailand as a transit route, particularly those assembled from Chinese parts, would face a 40% tariff, similar to the rate applied in Vietnam. The FTI believes this two-level tariff system would benefit Thailand more in the long run compared to eliminating U.S. import taxes.

Additionally, Mr. Hemmondharop highlighted the need for Thailand to swiftly transition its automotive industry from ICE (Internal Combustion Engine) vehicles to EV (Electric Vehicle) hybrids. He urged the government to establish clear policies and allocate necessary budgets to support this transition.