Thailand and US Relationship Over the Issue of Trade: Trump Tariffs on Thai Products and Markets

In a rapidly globalizing world, the dynamics of trade between nations often shift based on evolving political ideologies and economic imperatives. Among such transformations, the intricate relationship between Thailand and the United States stands as a vivid case study—especially under the shadow of the Trump administration’s protectionist agenda. As the United States veers once again toward economic nationalism and strategic decoupling from traditional supply chains, the question arises: how will a reinvigorated Trump-led policy environment shape trade with Thailand, particularly in the agricultural sector?

A Decade in Review: From Trade Partnership to Tension

Thailand and the United States have long enjoyed robust bilateral trade relations. The U.S. has consistently ranked among Thailand’s top export destinations, with key products including automobiles, electronics, seafood, textiles, and above all—agricultural commodities. However, the election of Donald J. Trump in 2016 heralded a new era of economic protectionism. His administration’s application of sweeping tariffs—particularly under Section 232 of the Trade Expansion Act and Section 301 of the Trade Act of 1974—transformed trade relations across the globe. Thailand, though not initially targeted with the ferocity faced by China or the European Union, has not remained untouched.

The Trump tariffs, ostensibly imposed to protect U.S. industries and reduce the trade deficit, began to affect Thai exporters indirectly through global supply chain disruptions and directly through sector-specific duties, particularly in steel and agricultural products. As the U.S. gravitates back toward Trump-era economic policies, the ramifications for Thai exporters, especially those involved in agrarian goods, merit critical scrutiny.

Thai Agricultural Exportation: A Vulnerable Juggernaut

Thailand’s agricultural sector is a cornerstone of its export economy. The Kingdom is among the world’s top exporters of rice, rubber, tapioca, poultry, and canned tuna. In 2024, Thai agricultural exports to the United States were valued at over $5.2 billion USD, underscoring a vital dependency on American markets. Any disruption to this trade corridor, especially through increased tariffs, non-tariff barriers, or quota limitations, could ripple across Thailand’s rural economy.

The Trump administration has historically viewed agriculture through a transactional lens—one that prioritizes domestic farming interests while weaponizing food and agribusiness in broader geopolitical negotiations. Should Trump reclaim the presidency in 2025, as current political forecasts suggest, a renewed scrutiny of Thai agricultural imports is plausible. In his first term, Trump suspended Thailand’s eligibility for the U.S. Generalized System of Preferences (GSP), citing labor rights violations and intellectual property concerns. This suspension disproportionately impacted small and medium Thai agricultural exporters, forcing them to bear the full burden of American import tariffs.

A renewed Trump policy could double down on this approach, particularly if linked to enforcement of “America First” mandates in food safety, origin traceability, and bilateral trade deficits. For example, stricter phytosanitary standards or country-of-origin labelling rules could act as de facto barriers against Thai fruits and seafood products, even if no new tariffs are officially announced.

Economic Implications: Sectoral Fragility and Strategic Realignment

From an economic standpoint, renewed trade tensions with the U.S. could act as both a threat and a catalyst for structural change within Thailand. In the short term, tariffs or trade restrictions would adversely affect Thailand’s GDP growth, which remains export-reliant. Agricultural zones, already grappling with climate variability and rising input costs, would suffer further if access to the U.S. market is curtailed. Analysts project that a 10% average tariff increase on Thai agricultural goods could lead to a 1.2% contraction in national agricultural output, with job losses affecting over 200,000 rural workers.

In response, the Thai government may pursue diversification of its export markets—enhancing ties with ASEAN neighbors, China, and the European Union. Additionally, an emphasis on vertical integration, technological upgrading of the agricultural value chain, and organic or certified production could help Thailand navigate non-tariff barriers imposed by Western economies. Yet such a transformation is neither quick nor guaranteed.

The Thai baht’s volatility in the face of shifting U.S. interest rates and capital flows could exacerbate these issues. An appreciating dollar, coupled with protectionist trade measures, would erode the price competitiveness of Thai exports. Meanwhile, foreign direct investment (FDI) from the U.S.—particularly in agri-processing, logistics, and biotech—might decelerate amid a more adversarial bilateral climate.

Geopolitical Maneuvering: Thailand’s Strategic Calculus

Beyond economics, the evolving U.S.-Thailand trade relationship under a Trump resurgence must be situated within broader geopolitical calculations. Thailand has historically maintained a balancing act between its strategic alliance with the United States and its growing economic ties with China. Under a second Trump term, U.S. pressure may intensify for Thailand to align more explicitly with American Indo-Pacific objectives, especially in trade and security matters.

Trade agreements may increasingly be linked to strategic compliance—meaning that economic favors or relief from tariffs might be contingent upon Thailand adopting U.S.-friendly stances on China, digital governance, or supply chain realignment. In this light, economic negotiations may become less about tariffs and more about strategic loyalty.

From Thailand’s perspective, the policy path forward must emphasize multilateralism and resilience. Efforts to revive or join regional trade agreements such as the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) could provide a buffer against the vicissitudes of American unilateralism. Similarly, enhancing domestic R&D, sustainable agriculture, and supply chain traceability could pre-empt future U.S. protectionist triggers.

Looking Ahead: The Next Three Years

Should Trump return to power in 2025, Thai economic planners must brace for a trifecta of challenges: tariff uncertainty, regulatory unpredictability, and strategic entanglement. However, these risks may also compel Thailand to accelerate long-delayed reforms in agricultural modernization, export diversification, and digital traceability—potentially enhancing its long-term competitiveness.

Forecasting Trump’s policy posture toward Thailand over the next three years yields several likely trajectories:

1. Renewed Tariff Instruments: Trump is expected to intensify bilateral tariff tools under the guise of national security, especially in sectors where Thailand runs a surplus with the U.S.

2. Conditional Trade Access: Market access to the U.S. could be tied to political or strategic demands, making trade policy less predictable and more transactional.

3. GSP and FTA Reevaluation: A Trump-led administration might re-engage with the idea of bilateral trade agreements but only under stringent “reciprocity” terms that favor American exporters and domestic jobs.

4. Supply Chain Realignment Pressure: Thailand may be asked to align with the U.S. in reshoring or “friend-shoring” critical supply chains, particularly in food security and health-related goods.

The relationship between Thailand and the United States, though historically cooperative, is entering a phase of recalibration. A second Trump presidency would likely mark a period of heightened economic nationalism, regulatory volatility, and strategic brinkmanship—one that challenges Thailand’s agricultural exporters and economic policymakers alike.

Yet within this uncertainty lies the potential for adaptive resilience. Thailand, with its deep agricultural base and strategic location in Southeast Asia, remains well-positioned to pivot toward new markets, embrace sustainable production, and assert its autonomy in an increasingly transactional world.

The next three years will test the elasticity of the Thai economy, the vision of its policymakers, and the adaptability of its farmers. The road ahead may be fraught with tension, but therein also lies the impetus for transformation.