Shock, chaos and negotiations behind Thailand’s trade trading

When US President Donald Trump made a dramatic tariff on April 2, there was no bigger shock than Southeast Asia, based on export exports and economic models around the world.

Levi struck a variety of industries from 49%in some countries, ranging from electronic exporters from Thailand and Vietnam to chip manufacturers in Malaysia and clothing factories in Cambodia.

“I remember that I woke up in the morning, which was quite early, and he saw his board on the White House lawn with his board. Richard Han, who founded HANA Microelectronics, one of Thailand’s largest contract manufacturer, says.

Faced with a 36%imposition, Thailand, like most neighbors, has made a deal to reduce tariffs to 19%.

The negotiations went down to the wire and finished two days before Trump was set up until August 1. It was the process of arriving there, and there are few details on the agreement.

As a known block of Southeast Asia, 10 countries in ASEAN exported $ 470 billion (£ 36 billion) to the United States in 2024. Vietnam is the most exposed economy to the United States, with a total of $ 137 billion, accounting for about 30%of GDP.

At that time, the Vietnamese government first escaped from the block to negotiate with the United States, and for the first time in the region, Trump was dealing with 46%of interest rates imposed on them.

According to the US president, the contract has cut tariffs by 20%, and Vietnam argues that it will no longer impose tariffs on US imports. In other words, the Vietnamese leadership did not say anything about this transaction.

There are no details, written or signed documents, and some reports say that Vietnam does not agree with the number of Trump. But they set standards for other countries in this area.

Indonesia and the Philippines have since then have reduced tariffs to 19%, but none of the countries rely on US exports.

Thailand exports a lot to the United States. Last year they earned more than $ 63 billion, about one fifth of total exports. Thailand should have been in the head of Washington’s queue, and he pleaded with Trump’s 36% tariffs to decrease.

However, Thailand is not Vietnam, and it is not a daily communist state that can quickly determine critical decisions by some leaders, and there is little need to worry about business or public opinion.

Rather, like Korea and Japan, many problems have occurred after a lot of problems despite the Thailand and the US allies. Thailand must fight against domestic politics and public opinion. Thailand also has a weak and amazing coalition government and has a variety of benefits.

More badly, the decision that is still not related to trade has made the United States angry.

In February, he dispatched people in Thailand for more than 10 years in China, and disregarded the US Secretary of State Marco Rubio. A Thai trade management told the BBC that US negotiators were raising Uyghurs in a customs talks in May.

Then, the local army commander had to complain of the Res-Majo Zeste about American studies, trapped him in jail, and left Thailand. So Thailand was far from being in front. Thailand was found behind a line.

Another difficulty faced by the Thai trade team was that the United States demanded the tariff rate, especially the Thailand’s agricultural market.

Food is a big business in Thailand. CP Group, one of the world’s agricultural giant, is the largest company in this country. This US demand was painful in Thailand.

“Vietnam has opened a box of Pandora.” “By providing 0 %tariffs on US imports, they have difficulty in those who can’t easily open all sectors in US competition.”

WORAWUT Siripun, 3 hours away from the Bangkok in Nakhon Nayok, maintains 12,000 pigs. Thailand’s important business; Thais eat a lot of pork. He is active in THAI Swine Raisers Association and lobbies to eliminate the tariffs of American pork.

“American farmers are producing much larger than we are and low in costs. Therefore, the price of pork will be lowered and domestic farmers cannot survive.”

The approach to the agricultural market also tried to protect rice farmers in negotiations with Japan and was one of the main obstacles with India.

In Thailand, it is estimated that agricultural giant, such as CP, is losing against the request to open other sectors such as poultry and corn. The BBC understood that there was an enthusiastic meeting between the trade team and the cabinet minister after the tariff talks held in Washington, the BBC understood.

But on the other hand, there is a manufacturer of Thailand, and he is much more contributed to GDP than agriculture. They needed a deal.

SUPARP Suwanpimolkul, Deputy Director of SK Polymer, said, “If we get 36%, it will be terrible for us.” The company prevents components of rubber and synthetic materials for washing machines, refrigerators and air conditioners.

“I guarantee that you can find at least one product at home.”

SK Polymer was founded in 1991 by SuPARP and his two brothers. The story is a story of Hyundai Thailand originated from his father’s small family business.

They are essential parts of complex supply chains, and the product can join other components in several countries to export consumers, industrial or medical supplies. About 20%of the company’s income comes from the United States, but the number is much higher if it contains products containing components. Trump’s tariff threw a spanner in the work.

Suparp said, “We have a small margin, and he can save money and still manage it with a tariff of up to 20% or 25%. When he talked with the BBC, before the transaction was announced, he said that uncertainty was the biggest challenge.

The 20% charge is also tasted for electronic manufacturers, a Thai company.

Richard Han, the CEO of Hana Microelectronics, said, “We all of us in this area will not find about 20%of buyers, and it will be taxes such as VAT.The company is a basic component that enters everything of digital life such as printed circuit boards, integrated circuits, and RFID tags for price sets. Make it.

Han says only about 12%of his products go directly to the United States, but like SK Polymer, the rate of indirect progress as part of other manufacturing products is much higher. But worrying about him is not just a tariff number.

His concern is transmission. The United States claims that China is avoiding tariffs by routing production through Southeast Asia. According to President Trump, Vietnam will already pay 40% (new tariffs) for products that US judges are transformed.

In Thailand and Vietnam, foreign investment increased significantly after the tariffs were imposed during the first Trump, and US exports also rose. Some of them are produced by Chinese companies. Some were using many Chinese components. And they are not just from China.

In other electronic manufacturers, SVI, the robot gl won the assembly line to bring hundreds of small components to assemble the circuit boards of millions of dollars. Simply looking at the label, the components came from Malaysia, the Philippines, Taiwan and China.

SVI usually creates security cameras, custom amplifiers, and medical equipment according to the customer’s specifications in Scandinavia. The important manufacturing sector in Thailand is part of a tremendous complex global supply chain, which is almost impossible to re -arrange to meet the demands of the US president.

In accordance with the WTO rules, more than 40% of the value is added to the local manufacturing process, or if the iPhone is assembled in the case of “substantially converted” to a new product, the product is considered local when another method comes.

The Trump administration does not pay attention to the WTO rules, and it is not clear what will be considered a trans player, but one president is concerned that if the United States insists on more regional components or claims less in China, it may be a bigger problem for tie companies than the standard tariff rate.

“Southeast Asia relies heavily on China,” he explained. “China has the largest supply chain for electronics and many other industries and is the cheapest.

“We can buy data from other regions of the world. It will be much more expensive. But in Thailand, Vietnam, the Philippines, or Malaysia, it will be virtually impossible to get a very high critical price that gains 50-60%in that country, and no one can obtain certificate of origin if it is a condition of obtaining a certificate from the United States.”

Currently, some of these details have been released. Trump claimed that he had received 0 %of tariffs on US products in the Philippines and Indonesia, but these countries said it was not accurate.

In the case of the Thai government, it would be relieved to start too late and struggle to meet us.

They will worry about how to trade later as the details are solved. It usually takes a few years. And they are not far away by themselves. Both rich and developing countries are trying to catch Trump’s mercury tariff policy.

“At some point, this must stop. Do you have to stop?” Han says. “The problem is that we don’t know what the rules of the game are. So we’re all waiting to find ways to milling and playing new games.”