Following anti-dumping duties of up to 972 per cent, Thailand's exports of solar panels have plummeted by over 80 per cent since early 2025. - Freepik
BANGKOK: Economic analysts warn that a 40 per cent 'circumvention' tax and new strategic levies on machinery could derail Thailand’s recent export growth to the United States.
Despite a recent surge in trade with the United States, Thailand’s economic outlook for 2026 is overshadowed by two looming "high-stakes" risks.
Supanutt Sasiwuttiwat, a leading researcher at the Thailand Development Research Institute (TDRI), warns that new American trade enforcement could see Thai goods slapped with tariffs as high as 40 per cent.
The primary threat stems from "Circumvention Tariffs." Washington is increasingly suspicious of the correlation between rising Chinese imports into Thailand and Thailand’s subsequent export spike to the US.
Analysts fear the US may impose a strict "60 per cent local content" rule; failing to meet this could result in Thai-made goods being classified as Chinese-origin, triggering a 40 per cent penalty rate.
Furthermore, the US is expected to expand "Section 232" measures to protect its own strategic industries.
This move specifically threatens Thailand’s medium-to-large truck and parts sector—an export market worth approximately seven billion baht—as well as electrical machinery containing steel or aluminium, which could face duties of up to 50 per cent.
Current performance: A fragile electronics boom
These warnings come on the heels of a surprisingly strong performance in late 2025.
Between August and November, Thai exports to the US grew by nearly 30 per cent, largely buoyed by a massive demand for electronics to power American data centres.
Specifically, exports of portable computers surged nearly 14-fold, while network equipment and computer components more than doubled.
However, the TDRI notes that this growth is precarious, as these very categories are the most likely to be pulled into the next round of "product-specific" US tax brackets.
The decline of targeted sectors
While electronics are currently thriving, other sectors are already feeling the pinch of prior US protectionism:
Solar Panels: Following anti-dumping duties of up to 972 per cent, exports have plummeted by over 80 per cent since early 2025.
Tyres: Subject to a 25 per cent levy, export volumes have effectively halved year-on-year.
Hard Disk Drives: Even without specific tariffs, this sector has contracted by 17 per cent due to shifting global demand.
Strategic Countermeasures
To navigate this minefield, Supanutt suggests the Thai government must move beyond passive observation.
He advocates for a "Regional Origin" negotiation, urging the US to count "Asean-wide" value-add as a single source of origin to protect regional supply chains.
Additionally, the TDRI recommends creating "trade leverage" by offering the US concessions in sectors it values.
For instance, Thailand could negotiate lower duties on pet food by highlighting its use of American-grown maize, effectively turning US farmers into allies for Thai trade.
“Thailand must use these negotiations as a catalyst for internal reform,” Supanutt concluded.
He suggested that liberalising the domestic service sector—allowing foreign shareholding to exceed 50 per cent—and phasing out archaic agricultural quotas could be used as powerful bargaining chips to secure Thailand’s place in the American market. - The Nation/ANN
