Thai exporters are bracing for a tougher second half of 2026 after the United States added a 12.5% tariff on many Thai goods starting July 24, a move analysts warn could erode the country’s price edge in key markets even as the government works to negotiate relief with Washington.
The duty was imposed under Section 301 of the US Trade Act of 1974, layered on top of standard Most-Favored-Nation rates, after Washington determined Thailand had not effectively banned imports made with forced labor and had not signed a specific trade agreement with the United States, according to several news sources. Thailand’s Commerce Ministry, led by Suphajee Suthumpun, says the government will pursue a broader reciprocal trade deal with Washington while rolling out support for exporters in the meantime.
The blow is partly cushioned by exemptions. Washington has excluded 2,120 Thai export products from the added 12.5% charge, a list covering more than half the total value of Thailand’s exports to the US. Exempted goods include integrated circuits, hard disk drives, aircraft parts, natural rubber, rubber sheets and blocks, tapioca starch, fresh and dried fruit, fresh coconuts and coconut water, and cane sugar.
Even with those carve-outs, Asia Plus Securities warned this week that the tariff could weaken Thai exporters’ competitiveness and add pressure to economic growth in the second half of the year, particularly as Thailand’s expanding trade surplus with the US raises the odds of further American trade action down the line, according to several news sources.
The trade numbers show what’s at stake. Thai exports rose 20.8% year-on-year in June to $34.66 billion, marking a 24th straight month of growth, though imports jumped 50.3% to $41.19 billion, leaving a monthly trade deficit of $6.53 billion. Over the first half of 2026, exports climbed 17.6% to $196.74 billion while imports rose 38% to $228.49 billion, producing a trade deficit of $31.74 billion for the period.
Electronics have driven much of that growth. June shipments in the sector surged 66% year-on-year, with electronics exports to the US alone climbing 73% and contributing roughly 14.7 percentage points to Thailand’s overall export growth, according to Kasikorn Research Center. That strength helped the Trade Policy and Strategy Office raise its 2026 export growth forecast to a base case of 8%, with a best-case scenario of 11%.
Not everyone is convinced the exemptions will be enough to offset the new tariff’s reach. One estimate puts roughly $30 billion in Thai exports over the remaining months of 2026 as potentially exposed to the duty, with about $24.4 billion of that concentrated across 11 major export sectors, according to several news sources.
To help affected businesses adjust, the Commerce Ministry is preparing low-interest loans, tax relief, and reduced logistics costs, while continuing talks toward what officials call an Agreement on Reciprocal Trade, aimed at securing a lower long-term rate from Washington.
Industry groups have struck a more measured tone than some analysts. The Thai Chamber of Commerce argues the tariff’s overall sting is limited because most of Thailand’s competing exporters face the same 12.5% rate, meaning countries that landed a 10% rate hold only a modest advantage rather than a decisive one.
No timeline has been set for when the reciprocal trade negotiations might wrap up. Officials say discussions with Washington are continuing, and the Commerce Ministry has not indicated when a revised rate or agreement might be announced.
