US Reduces Tariff Rate on Thai and Cambodian Imports Amid Ceasefire Efforts

US Reduces Tariff Rate on Thai and Cambodian Imports Amid Ceasefire Efforts

Thailand and Cambodia: The United States has imposed a 19 per cent tariff on imports from Thailand and Cambodia, down from an earlier proposed rate of 36 per cent. This decision follows recent tensions, including a border clash between the two Southeast Asian nations that prompted former President Donald Trump to threaten suspension of trade agreements unless a resolution was reached. A ceasefire was agreed earlier this week following the deadliest conflict between the countries in over a decade, which resulted in over 40 casualties. However, the truce has faced challenges, with Thailand accusing Cambodian forces of violating the terms. The revised tariff rates were announced alongside the US decision to maintain its global minimum tariff at 10 per cent, lower than the previously considered 15 per cent threshold.

Thailand, which had been in talks with the US seeking a reduction in tariffs, described the outcome as a favourable result. In efforts to avoid a steeper levy, Thailand offered to provide greater access for US products by pledging to remove tariffs on 90 per cent of its goods and reduce its 46 billion USD trade surplus with the US by 70 per cent over three years through both tariff and non-tariff measures. The Thai Finance Ministry had anticipated a tariff rate in line with neighbouring Southeast Asian countries, where rates hover around 20 per cent. The US was Thailand’s largest export market last year, representing 18 per cent of total shipments. With Thailand’s economy already under pressure from high household debt and weak domestic demand, the reduced tariff is seen as a means to support its trade-dependent growth. The government has revised its economic growth forecast for the year to between 2.3 and 3.3 per cent, down from an earlier estimate of 3.2 to 4.2 per cent, citing uncertainty over international trade policy.

Source: SCMP