Thai authorities are drafting a relief plan to counterbalance the effects of Trump's import taxes
In a significant move, the Thai government has announced a compensation package aimed at mitigating the economic impacts of US tariffs while maintaining competitiveness and encouraging smooth market adjustment.
The package includes a range of measures designed to support businesses during the transition period to a reduced 19% tariff rate from the previous 36% level.
One of the key components is proposed tax cuts. The government is working on tax cuts, including potential corporate income tax reductions and tax credits, to help businesses adapt to the new tariff structure.
Financial subsidies will also be implemented using existing government funds to support sectors and groups affected by the tariffs, particularly those unable to fully pass on costs to buyers.
The government is rolling out soft loans initially worth 200 billion baht through state-owned financial institutions to provide liquidity for businesses needing to stock inventory or maintain operations. Efforts are underway to collaborate with commercial banks to offer further soft loans. Part of the 2025 economic stimulus budget, amounting to 24 billion baht, will be used to repay debts to state banks, which could increase lending capacity by up to 100 billion baht.
Different industries, such as electronics, processed foods, electrical appliances, diamonds, and gemstones, will receive targeted support with measures adapted to their specific cost-bearing abilities and market competition.
The jewellery and gem export group has raised concerns about the increased US import tariffs and may request a 1-2 year adjustment period, asking for tax measures such as tax reductions, rather than soft loans. The government aims to help businesses transition from traditional manufacturing platforms to more modern ones, using funding to support affected sectors and industries.
The FTA Fund will support farmers impacted by trade liberalisation by aiding in the restructuring of agricultural production. For some agricultural items, such as corn, the government will first purchase all domestic produce before considering imports.
Detailed discussions are ongoing, and a list of products to amend customs duties will soon be presented to parliament for approval. The 10-billion-baht Competitiveness Enhancement Fund is under consideration to support businesses affected by US tariffs, including those not currently benefiting from BOI incentives.
Pichai Chunhavajira is involved in the discussions about the government's support measures for businesses affected by US tariffs. The government is preparing a budget to address the impact of US tax measures, including 25 billion baht in the central economic stimulus budget for fiscal year 2026.
The Thai team is currently negotiating the details of a Joint Trade Agreement with the US for over 10,000 items, including agricultural products. An agreement has been reached between Thailand and the United States to reduce reciprocal tariffs from 36% to 19%, effective from August 7, 2025. Each case will be considered individually, focusing on the industries most impacted.
The government's strategic approach aims to strike a balance between economic growth and the well-being of affected industries, ensuring a smooth transition towards a more open and competitive market.
- To aid businesses in adapting to the new tariff structure, the government is considering tax cuts, including potential corporate income tax reductions and tax credits.
- Financial subsidies will be used to support sectors and groups affected by the tariffs, particularly those unable to fully pass on costs to buyers.
- Soft loans, initially worth 200 billion baht, will be provided through state-owned financial institutions to help businesses maintain operations or stock inventory.
- The government aims to help businesses transition from traditional manufacturing platforms to more modern ones, using funding to support affected sectors and industries.
- The Competitiveness Enhancement Fund is under consideration to support businesses affected by US tariffs, including those not currently benefiting from BOI incentives, as part of the government's strategic approach to achieve a balance between economic growth and the well-being of affected industries.
