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Thai exports to the US market are being closely watched to see how the Thai team’s tariff negotiations will turn out.
Prachachat Business recently conducted a special interview with Mr. Wisit Limluecha, Chairman of Mahaburapa Food Products Co. , Ltd. and President of the Thai Future Food Trade Association, on trends and trade signals regarding Thai exports to the US market and preparations for the upcoming risk factors.
Expected to negotiate with Trump successfully.
As President of the Future Food Trade Association, I provided the Thailand team with information on negotiations. I believe providing complete information will provide guidelines for tariff rates that will enable Thailand to remain competitive. I don’t want to see Thailand being forced to provide relief to domestic businesses and exporters. I expect the Thailand team’s negotiations to lower the tariff rate from 36%.
“We don’t expect Thailand to receive a tariff rate of 0% or 10%, but rather a tariff rate that Thailand can compete with, especially on similar products. Sudden adjustments may be difficult.”.
In July, trading partners began to slow down orders
As an exporter myself, the company exports no more than 10% of its total exports to the US market, regardless of the tariff rate imposed on Thailand. I believe the company can still adapt and find new export markets to replace the US market. However, finding alternative markets isn’t easy right away, as the global economy has been impacted, and importing countries are having to be more cautious due to concerns about a potential economic recession. However, I remain confident that the company can continue operating and won’t have to shut down.
However, exports to the US market will not be immediately achievable if we find other markets to replace them. Our competitors include Vietnam, China, the Philippines, and Malaysia, among others. Comparing current competitive tariff rates, the clear impact is that trading partners are holding back due to concerns about the tax rate Thailand will receive. To determine whether we will be competitive, we’ll have to wait until August 1st to determine the future of our trade and exports.
“We shipped approximately 10% of our products to the US market in early 2025. Importers have been steadily importing, but this slowdown began in July and is expected to continue until the end of this year. Trade partners are still awaiting assessments of Thailand’s tariff rates. Importers, on the other hand, will have to pressure exporters through negotiations. If they need to maintain this market, they will have to help us.”.
However, during trade negotiations, importers themselves will inevitably need to look for other markets with similar production facilities as Thailand, and this could lead to importers switching to those countries. This is quite concerning. While the possibility of this happening is high, the future impacts will need to be monitored. When supply chains are disrupted, there’s a high chance that products will be sent back to that market or region. For example, countries unable to export to the US market are more likely to see their products flow into Thailand. Similarly, if Thai products are unable to be exported, they are likely to go to other markets, as is the case with many other countries. This is unavoidable. This indirectly impacts us.
Focus on stock management – finding new markets.
As for our own exports to other markets, we must admit that there has been a significant slowdown. The overall market is not very active. Therefore, the company must plan, particularly regarding inventory management and production capacity. We may not utilize our full capacity, but we will use it adequately to meet incoming purchasing power so as not to burden the company. All operations affect the financial statements. Any spending may be tied up in production and inventory.
“This management approach suggests that many companies may need to take a closer look and consider managing themselves. Simply seeking alternative markets doesn’t mean immediate results in export figures. However, this process remains necessary to ensure market stability in the future, as uncertainty remains in the US market going forward.”
While long-term management of the company may require considering production upgrades through the introduction of technology, this requires careful consideration. In the current situation, investments in technology or machinery require consideration of return on investment, which remains risky due to market uncertainty, impacting planning and decision-making.
“This includes considering the purchase of raw materials for export production, while striving to maintain all aspects to keep costs as low as possible. Exports to other markets, although slowing, are still moving in a positive direction. For example, exports to ASEAN and Asian markets, such as Japan and South Korea, are still possible.”
Importers negotiate price reductions.
Importers are now signaling, whether from their own companies or the overall outlook for international exports. Importers are increasingly negotiating imports. Negotiations are primarily focused on price reductions to ensure continued import and distribution to consumers, and even on the expected tariff rates for Thailand if the goods arrive in the US. Importers are considering whether they can share the tariffs, at least half of the full tariff rate, as negotiations have been underway to ensure continued business.
This is especially true during the period when goods must be loaded onto ships, as exporting to the US market takes approximately 45 days, depending on the port of destination. It is also worth noting that if a company does not discuss or negotiate the terms and conditions, there is a chance that the importer will import goods from a competitor.
“It can be seen that overall Thai exports to the US market have been slowing down since August. Importers have been accelerating their imports, maintaining sufficient stocks to sell until the end of the year. Therefore, during this period, importers have been slowing down to await the tariff situation. Overall, the likelihood of positive export growth is highly unlikely.”
Complaining that the baht’s value is not beneficial to exporters
In addition to external factors beyond our control impacting the Thai economy and exports, another key factor is the exchange rate, which has not been positive, beneficial, or aligned with the realities of the Thai economy. Production costs continue to impact the minimum wage, which remains a matter of ongoing monitoring. These factors are uncertain and difficult to manage. Furthermore, transportation costs also require close monitoring.
However, in the current situation, food exports, particularly future products, still require careful consideration and appropriate marketing timing before launching new products. The company believes that this is not an appropriate time to market or launch new products. It is advisable to wait and see to ascertain the market situation, overall economic factors, and the optimal timing.
Exports in this product group continue to grow, but exports are expected to remain strong in the second half of 2025. Key export markets remain the United States, China, Europe, and ASEAN, and best-selling products remain beverages, particularly health products.
Read more at: https://www.prachachat.net/economy/news-1854900