Democrats’ victory in the US midterm elections has shifted the balance of power in Washington, and Thailand is weighing what it means for its own economy, especially its near-final trade deal with the United States.
Commerce Minister Suphajee Suthumpun said her initial assessment is that the election results may push the US government to be more careful about introducing new trade policies or measures.
Ongoing Thailand–US negotiations on the Agreement on Reciprocal Trade (ART) will continue, as President Trump still holds executive power and can impose trade measures under laws such as Sections 301 and 232.
The Minister expects the administration to continue using tariffs, making the upcoming talks still important, as it will keep Thailand competitive and give those in the ecosystem much-needed clarity.
In the long-run, Thailand must continue to watch the direction of US economic policy, in particular budget allocations and industrial support, which could impact international trade and investment.
Meanwhile, Poj Aramwattananont, chairman of the Thai Chamber of Commerce and Board of Trade of Thailand, said US trade policy after the midterms remains “a variable” to watch due to its impact on the global investment climate.
Key Takeaway
The midterms may change who controls Congress, but they don’t change who sets tariffs, so the ART talks are as urgent as ever. Thailand, meanwhile, has its own challenges to contend with, from economic uncertainty at home to an ambitious agenda of structural reform.
For Thai exporters, the deal’s importance is about closing a gap with regional peers, where growth in Thailand trails countries such as Indonesia and Vietnam. Since July, most Thai goods have faced a 12.5 percent US tariff under Section 301. Malaysia, Indonesia and Cambodia pay 10 percent due to their binding commitments under their own reciprocal trade agreements.
Thailand shares the higher rate with Vietnam and the Philippines, so it isn’t at a disadvantage against its closest rival. Importers often closely watch how these rates move, and could seek out suppliers in lower-tariff countries if rates are significantly different.
The trade talks come as the US-ASEAN Business Council, leading a delegation of 33 companies, presented proposals to Prime Minister Anutin Charnvirakul on Thursday, November 5th. Companies include representatives across automotive sectors, consumer goods, digital economy and tourism firms. Companies within the technology field re-affirmed their commitment to invest across areas such as AI and digital infrastructure.
The talks come amid increased effort to attract more foreign investment, whilst simultaneously preparing to finalize trade talks.
