US tariffs: Thailand concerned over localization requirements

Although the 19% tariff imposed on imports from Thailand is lower than or comparable to the rate applied by the U.S. on most other countries in the region, Thai officials and businesses remain concerned about the possibility of higher duties being levied on goods that fail to meet Washington’s new and stricter localization requirements.

The U.S. is pushing for a minimum of 60% of a product’s value to originate from within Thailand to qualify for the standard 19% tariff.

Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI), noted that while Thai exports have grown by 15% in the first half of the year, with a significant 27% increase to the U.S., this does not tell the full story.

He pointed out that Thailand’s Industrial Production Index has grown by less than 1%, suggesting that a large volume of exports are simply goods being transshipped.

The U.S. is holding firm on 50-60%. A source from the Thai government revealed that Team Thailand will argue for a 40% local content threshold. The Ministry of Commerce expects clarity on the final figure by the end of August 2025.