Can Thailand avert US trade retaliation under Section 301?

Thailand finds itself once again in the crosshairs of the Trump administration even before the uncertainties caused by US tariff policies had been ironed out.

On March 11, US Trade Representative Jamieson Greer announced new trade investigations under Section 301 of the US Trade Act. Thailand has come under scrutiny along with Mexico, China, the EU, Japan, India, Taiwan, Vietnam, South Korea, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia and Bangladesh.

The US is aiming to replace President Donald Trump’s reciprocal tariffs, which were earlier ruled illegal by the Supreme Court. Thailand is being targeted due to its sizable trade surplus with the US, which rose to $71.9 billion last year from $45.6 billion in 2024, making it the sixth largest trade partner, according to trade statistics from the United States Census Bureau.

The objective and scope of the law

Section 301 of the 1974 Trade Act empowers the US government to act when it believes American products face unfair treatment abroad. Designed to protect US businesses and workers, it allows the US to address perceived unfair trade practices by other countries.

The law was created to ensure American companies could compete fairly, and has been used numerous times over the decades when the US felt its trading partners were not following trade rules.

Section 301 was established in 1974, providing the US greater leverage to respond to trade challenges. As global trade has expanded, the significance of Section 301 has grown especially in disputes with countries such as China and Thailand.

The US Supreme Court’s recent ruling against Trump’s reciprocal tariffs policy has forced the administration to turn to Section 301 as an alternative tool.

The role of the USTR

The Office of the United States Trade Representative (USTR) manages Section 301 actions, investigating complaints and determining responses, including requests for policy changes or imposing tariffs.

Investigations typically last 12 months, and tariffs applied are not capped, expiring automatically after four years unless extended by request. The USTR may target individual countries or groups, depending on the findings.

Section 301 has been deployed frequently by successive US administrations. Countries such as China and Thailand have faced scrutiny for not opening their markets sufficiently or for treating US businesses “unfairly”.

The law has also been used to address trade imbalances and promote US economic interests.

Anusorn Tamajai, a People’s Party MP and former dean of the School of Economics at the University of the Thai Chamber of Commerce, explained that the Trump administration’s use of Section 301 was “a way to ease internal economic pressure”.

“It aims to promote domestic manufacturers, domestic employment and exports, and to reduce product knockoffs and exports of such knockoffs to the US that make it impossible for US producers to compete. The Supreme Court ruled that previous tariffs could not be applied generally, but Section 301 remains available for trade protectionism,” he said.

A tough task for government

The US expects Thailand to liberalize access to its market, allowing American products and companies fair competition. This includes reducing restrictions on US goods and treating US businesses equally.

Among specific areas where the US seeks market liberalization are agriculture, intellectual property and services. For example, the US wants Thailand to protect American inventions and brands, and permit more US companies to offer professional services.

During Trump’s tariff negotiations, the US requested Thailand to buy more US agricultural goods (maize, soybean, pork), manufactured items (airplanes, liquefied natural gas, crude oil), and exempt US digital services from import duties.

Investigations under Section 301 focus on sectors with global trade surpluses, such as automobiles and parts, machinery and rubber, according to the Thai Commerce Ministry.

The US reviews whether these products face unfair barriers or discriminatory policies in Thailand.

Challenges for Thailand

Thailand’s government faces complex challenges responding to Section 301.

Balancing US demands with local economic interests is a delicate tightrope walk, and rapid policy changes are not always feasible. There may also be internal disagreements about how to address US requests.

Commerce Minister Suphajee Suthumpun revealed that the Ministry of Commerce has formed a special task force chaired by permanent secretary Vuttikrai Leewiraphan, with directors-general from all departments to analyze sector-by-sector impacts and develop strategies to clarify and defend Thai products against additional tariffs.

The US investigation can result in trade retaliation if it determines Thailand’s policies are unfair or discriminatory.

The Ministry of Commerce argues that Thailand differs from other countries under investigation. Unlike Switzerland, Norway and Vietnam, Thailand has not been accused of currency manipulation.

Nor does it provide direct cash export subsidies, which some countries such as Bangladesh do. Suphajee said that Thailand would actively participate in the clarification process, submitting written comments to the USTR by April 15, 2026, and request to participate in the public hearing scheduled for May 5, 2026, in Washington, DC. Rebuttal comments may be submitted within seven days after the hearing.

“Section 301 does not set a cap on tariff levels. In the past, the US used Section 301 against China and imposed tariffs of up to 100 per cent. We are not too worried about the ‘reasonableness’ aspect because we have points we can explain, but we must provide very clear clarification in cases involving rules of origin,” Suphajee said.

Fear of retaliation

Aat Pisanwanich, an independent economist, expressed concern about possible US trade retaliation under Section 301 and urged the government to carefully navigate these negotiations.

He highlighted concerns about the broad interpretation of Section 301. “Interpretation of the law is very comprehensive; it could cover both Thailand’s use of low-cost raw materials and cheap imported materials to make final goods and export them to the US market,” he said.

Aat also noted that the US-Israel conflict with Iran complicates trade negotiations. “The government needs to tread carefully—for example, if it wants to buy crude oil from Iran, it may have to inform the US.”

He questioned whether Suphajee is prepared for trade negotiations given her lack of international trade experience, arguing, “Suphajee relies heavily on inputs provided by officials.”

Meanwhile, Prida Tiasuwan, founder chairman of Pranda Jewelry PCL, shared his experience from a Section 301 investigation over 30 years ago.

“I have adjusted my business strategy by making products cheaper and diversifying export markets. Thai businesses should be looking for other markets, not relying too much on the US market as we used to,” he said.