Thailand needs to revamp its import regulations and investment promotion policies — key drivers for Chinese capital flows into the Southeast Asian nation in recent years — as a hefty US tariff threatens to hurt the nation’s export-driven growth, according to former prime minister Thaksin Shinawatra.
The threat of a 36% levy on shipments to the United States should serve as a “good wake up call” for the government headed by his daughter Paetongtarn Shinawatra to crack down on foreign manufacturers circumventing local content requirements, Mr Thaksin told a seminar organised by the American Chamber of Commerce in Thailand on Thursday.
He cited the country’s electric vehicle industry, which has drawn billions of dollars of investments from several Chinese automakers in recent years due to government incentives.
“We have a huge deficit with China and we have a moderate surplus with the US. Maybe something is wrong here,” Mr Thaksin said. “So we’re going to change our policy because of the tariffs.”
Mr Thaksin’s comments came as Thai officials prepared to negotiate with the US to lower the so-called reciprocal tariff, among the highest rate slapped by the Trump administration. Thailand ran a US$46 billion trade surplus with the US, its largest export market, last year.
Mr Thaksin’s views also signal a potential shift in stance for Thailand, which has greatly benefitted from Chinese investments as a result of global supply chain relocation trends. From 2022 to 2024, Chinese companies - including ByteDance’s arm in Singapore - were the largest source of foreign direct investments in Thailand, according to data from the Board of Investment. They accounted for nearly 28% of foreign investments during that period, while US companies made up about 8%.
The trade war also shows the dilemma facing countries like Thailand, which have tried to remain neutral. While Washington is pushing countries seeking relief from tariffs to curb trade with China and rein in Beijing’s manufacturing power, Chinese authorities have warned other countries against striking deals with the US that could hurt its interests.
Thailand is also willing to adjust its import tax policies to benefit US goods, stepping away from World Trade Organization rules in favour of bilateral agreements, Mr Thaksin said, citing US corn as an example. Liquefied natural gas is also another product that Thailand plans to import more from US to help narrow the trade gap, he said.
Mr Thaksin, who does not hold any official position in his daughter’s administration, is viewed by many as a major force in shaping the government’s policies and initiatives.
Thai and US officials postponed tariff talks initially slated for this week, with Ms Paetongtarn saying that Washington wanted her administration to review some issues beforehand. She has since ordered officials to take steps to stop the misuse of the certificates of origin by foreign companies trying to dodge higher US import tariffs. Thailand will also look into US concerns over currency manipulation, Finance Minister Pichai Chunhavajira said earlier this week.
Thailand’s “wait and see” approach to the tariff negotiations has raised some questions about the government’s strategy while other Southeast Asian neighbours including Indonesia and Vietnam have already made progress with their US talks.
Mr Thaksin, a former business tycoon, said that “it’s quite tough” to negotiate with the US, but also reassured the audience of American businesspeople that Thailand was well-prepared and ready for talks.
The negotiations are “not as simple as ‘how many percent’,” Mr Thaksin said. “The government is well-prepared and ready to go anytime they want us to go.”
