Thailand Inches Toward US Pact to Avoid 36% Tariff by Aug 1

* Thailand nears a US trade deal to avoid a 36% tariff by the August 1 deadline. * The agreement aims to address a $46 billion trade surplus and bolster the nation's economy. On July 22, 2025, Thailand’s Finance Minister, Pichai Chunhavajira, stated that trade negotiations with the United States are in their final stretch, with a deal aimed at avoiding a 36% tariff on Thai exports now over 90% complete. “We have completed more than 90% of the negotiation. Today or tomorrow should be the very final stretch,” Chunhavajira said, highlighting the urgency as officials race to finalize the agreement before the critical August 1 deadline. The proposed deal addresses Thailand's substantial $46 billion trade surplus with the US, which is the country's largest export market and accounted for 18% of total shipments in 2024. Under the revised terms, Thailand has committed to increasing its imports of American goods, including agricultural products, Boeing aircraft, and liquefied natural gas (LNG). The country has also pledged to invest in US projects, such as the Alaskan gas initiative. Furthermore, Thailand expanded its tariff-free list of US products from just over 60% to 90% of all items. Analysts from the Thai Chamber of Commerce estimate these measures could shrink the trade surplus by 70% within three years and project that Thailand can achieve a trade balance in five years. Securing the deal is pivotal for Thailand, as its export performance has lagged behind regional peers like Vietnam and Indonesia. In addition, the country aims for a tariff reduction to levels comparable to these nations; Vietnam currently has a 20% rate and Indonesia has a 19% rate. The urgency to secure an agreement comes amid mounting political and economic pressures, including the suspension of Prime Minister Paetongtarn Shinawatra and weak domestic consumer spending. As a result, a successful resolution is expected to restore investor confidence and bolster Thailand’s economic recovery.