US 12.5% Section 301 tariff puts ฿1tn in Thai exports at risk

A 12.5% import tariff imposed by the United States under Section 301 of the 1974 Trade Act could threaten Thai exports worth more than 1 trillion baht over the final five months of the year, trimming full-year export growth to 6–7%, according to a prominent trade expert.

Assoc. Prof. Dr. Aat Pisanwanich, an independent expert on international economics and ASEAN trade, said that the additional tariff took effect on July 24, following the expiration of a 150-day temporary 10% levy under Section 122 of the same act.

The previous temporary measure was introduced on Feb 24 after a US Supreme Court ruling on Feb 20 determining that the International Emergency Economic Powers Act (IEEPA) does not authorise the US president to impose import duties.

Dr. Aat explained that “Section 301 was invoked against Thailand on grounds that the country lacks and fails effectively to enforce prohibitions against goods produced wholly or in part using forced labour.”

“Such lapses could allow forced-labour products into supply chains, putting non-compliant manufacturers at an unfair cost advantage,” he said.

Dr. Aat further noted that almost all Thai product categories exported to the US fall under the scope of the 12.5% tariff, except for items specifically exempted by the US Trade Representative.

Vulnerable products include electrical appliances and electronic components, among other key manufactured goods.

The trade scholar warned that the tariff hike could drag Thai export growth to the US market down by 4 to 6 percentage points.

To cushion the impact, Dr. Aat urged the government and relevant agencies to expedite negotiations for product exemption lists, strengthen supply chain auditing, to ensure compliance with labour standards, and provide soft loans or credit facilities to support vulnerable exporters.