In short, the U.S. raising Thai tariffs by 36% is not the end of the story.
On April 2, 2025, former President Trump signed an Executive Order (EO) imposing Reciprocal Tariffs under the International Emergency Economic Powers Act of 1977 (IEEPA). According to a report from the Government House, the key points are summarized as follows:
1. Baseline Tariff: A 10% tariff will be applied to all imported goods from all countries, effective from April 5, 2025.
2. Individualized Reciprocal Higher Tariff: A country-specific tariff will be imposed on all imported goods from countries with which the U.S. has a significant trade deficit. Thailand has been set at a 36% tariff, effective from April 9, 2025.
3. Goods Excluded from the Reciprocal Tariffs :
(1) Products already subject to Section 232, including steel, aluminum, automobiles, and automobile parts.
(2) Products listed in Annex II of the EO, covering copper, pharmaceutical products, semiconductors, processed wood, critical minerals, and energy.
(3) Other products that may be subject to Section 232 in the future.
(4) USMCA Import tariffs on goods from Canada and Mexico (25% for all goods / 10% for energy and potash) will continue under the EO concerning illegal immigration/fentanyl issues. Goods meeting the criteria under USMCA will not be subject to tariffs. If the EO is repealed, goods not meeting USMCA criteria will face a 12% reciprocal tariff.
(5) Duty-free de minimis: Imported goods valued under USD 800 will continue to enjoy duty-free treatment under the minimum threshold rules.
4. Adjustments to the Implementation of the EO :
(1) The Department of Commerce and the Office of the U.S. Trade Representative, together with the Departments of State, Treasury, Homeland Security, the Assistant to the President for Economic Policy, the National Security Advisor, and the Senior Advisor for Trade and Manufacturing, must propose additional measures if the EO fails to reduce the overall trade deficit, even after expanding reciprocal tariffs. This aims to protect U.S. economic and national security interests.
(2) If any trading partner retaliates by imposing tariffs on U.S. goods or other measures, the President may consider increasing or expanding the scope of tariffs under this EO to enhance effectiveness.
(3) If a trading partner takes significant steps to remedy unfair trade practices and aligns with U.S. economic and national security priorities, the President may consider decreasing or limiting the scope of tariffs under this EO.
(4) If U.S. production capacity and output continue to worsen, the President may consider raising tariffs under this EO.
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