BANGKOK, 1 August 2025 — The United States has set a new 19% import tariff on goods from Thailand and Cambodia, significantly lower than the previously threatened 36%, following a peace agreement that ended a deadly border clash between the two Southeast Asian neighbors.
The tariff announcement came after high-stakes negotiations and a ceasefire brokered with support from Malaysia, which also saw its own tariff rate set at 19%—aligning with existing rates for Indonesia and the Philippines.
Trade Negotiations Avoid Major Economic Hit
In an effort to avert harsher trade penalties, Thai officials offered wide-ranging concessions:
- Scrapping tariffs on 90% of US goods
- Pledging a 70% reduction of its $46 billion trade surplus over three years
- Targeting non-tariff measures such as curbing product rerouting
Finance Minister Pichai Chunhavajira expressed relief, noting that the final 19% rate aligns with regional expectations and provides a buffer against further economic fallout.
Strategic Importance of US Market
With the United States accounting for 18% of Thailand’s exports last year, securing a lower tariff rate is critical for preserving growth in the country’s trade-dependent economy. Analysts warn that Thailand’s recovery is already constrained by high household debt and weak domestic demand.
Despite the ceasefire agreement, tensions remain fragile—Thailand recently accused Cambodian troops of violating the truce with unprovoked fire. Nonetheless, the tariff resolution marks a key turning point in diplomatic and economic relations between the two countries and the US.
For ongoing coverage of Southeast Asia’s trade developments, visit Thailand Business News.
