Thailand's main opposition party called for an economic stimulus package to cope with the US tariff after Prime Minister Paetongtarn Shinawatra signalled that trade talks to secure relief from the levy have been stalled.
The stimulus measures should include soft loans to local exporters, subsidies for farmers and financial aid to Thai industries to deal with the 36% reciprocal levy threatened by the United States, said Sirikanya Tansakun, a lawmaker and deputy leader of the People's Party.
The government can also rework its 3.78-trillion-baht (US$113 billion) budget plan for the fiscal year starting Oct 1 to shield the economy, or resort to a one-off borrowing plan as it did during the coronavirus (Covid) pandemic, Ms Sirikanya said. If need be, the prime minister should be willing to raise the legal ceiling of public debt from the current 70% of gross domestic product (GDP), she said.
The Finance Ministry aims to inject over 500 billion baht into the economy to support growth, with the spending to be focused on stimulating consumption, investment and providing soft loans, according to Finance Minister Pichai Chunhavajira.
The postponement of Thai-US tariff negotiations previously scheduled for this week has raised questions about the government's strategy to deal with tariff impact and the US concerns over the Southeast Asian nation’s trade surplus of $46 billion.
No new dates have been set for talks, and Washington wants the Southeast Asian nation to address a set of "issues" related to trade before talks are held, Thai officials said Tuesday. In contrast, India, Vietnam and Indonesia have already negotiated with the US to secure relief from the hefty tariffs threatened by President Donald Trump.
People’s Party deputy leader Sirikanya Tansakun. (Photo: Nutthawat Wichieanbut)
Ms Sirikanya said the government should lose no time in starting negotiations to get the tariff lower and prevent the economy from being hit hard. The US was Thailand’s largest export market last year with electronics, machinery and agriculture products topping the list of shipments.
"The economic wound from the US tariff on Thailand is expected to be wide, deep and long," Ms Sirikanya said. "The government should be better prepared to help Thai people and give confidence to investors. Don't just wait and see, or a lot of people will get hurt."
The Thai government has said the higher-than-expected levy on its shipments to the US could trim at least one percentage point of its growth this year if it is not negotiated down. It will need to address US concerns over currency manipulation and certificate of origin misuse, something officials have said they would do.
Thailand has offered to step up imports of US commodities like corn, natural gas and ethane, besides reducing import duties and removing non-tariff barriers to secure a deal before the 90-day pause on the so-called reciprocal tariff ends.
While Thailand is taking steps to appease the US, Ms Paetongtarn's administration is also wary of antagonising China, its largest trading partner. Bangkok's trade deficit with Beijing ballooned to $45 billion in 2024 from below $20 billion in 2018 as Chinese companies stepped up investment to circumvent the US tariff wall.