Thailand could suffer a US$7 billion to $8 billion hit from potential US tariffs if the US administration were to even up levies between the two countries, but it has a strategy for trade negotiations, senior officials said on Wednesday.
Thai semiconductor exports may face tariffs of 25% from the United States, Vuttikrai Leewiraphan, the permanent secretary for commerce, said ahead of US President Donald Trump's planned announcement of new trade barriers.
"Thailand collects tariffs of about 11% higher than the US in agriculture and industrial," Mr Vuttikrai said.
"So, if we are hit with 11% more, we could see losses of about $7 billion to $8 billion."
Thailand will adopt a "holistic approach" to trade negotiations to minimise the impact on its economy, he said.
Thailand wants to avoid US tariffs and has said it would try to increase imports of corn, soybeans, crude and ethane to narrow its trade surplus with the United States. Exports are a key driver for Southeast Asia's second-largest economy.
Commerce Ministry data shows Thailand had a $35.4 billion trade surplus with the United States last year, while Washington has put its deficit with Thailand at $45.6 billion.
The US is Thailand's largest export market with electronics, machinery and agricultural products topping the list of goods. With Trump raising tariffs on Chinese products, Thai business groups have warned the region's second-largest economy also risks an influx of cheap goods from its Asian neighbour.
Trade-reliant Thailand stands to be the biggest loser in the region given its large exposure to the two sectors most vulnerable to reciprocal tariffs: agriculture and transport, according to Nomura Holdings Inc.
Thai food and energy companies plan to step up US investments, especially in the "red states," Mr Vuttikrai said referring to Republican controlled states. Investment by Thai companies in the US total about $17 billion, helping generate about 11,000 jobs, he said.
In addition to importing more from the US, he also said the government has prepared proposals that include cutting US import tariffs for some products and offering unspecified non-tariff measures. The US decision to raise tariffs on steel and aluminium have already hit Thai shipments, with fresh orders drying up, Mr Vuttikrai said.
In the future, Thailand will diversify its export markets to offset the hit from US tariffs, he added.
InnovestX Securities reported that the reciprocal tariffs expected to be announced by US President Donald Trump on Wednesday could shrink Thai GDP by as much as 1.2 percentage points from a forecast of 2.5%.
