August 1, 2025 - In a move that has sent ripples through global markets, US President Donald Trump announced a new round of reciprocal tariffs, with a significant focus on countries in the Association of Southeast Asian Nations (ASEAN). The announcement, made on July 31st local time via social media, revealed a new executive order imposing a 19% tariff on goods from Thailand, down from a previously threatened 36%.
This development comes after intense negotiations and a regional ceasefire agreement. Thailand and Cambodia had been under pressure from the Trump administration to resolve an ongoing conflict, with the US president warning that trade deals were at risk. The conflict culminated in a ceasefire agreement in Malaysia on July 28th, paving the way for these tariff negotiations to conclude.
The new tariff rate for Thailand is part of a broader framework of "reciprocal tariffs" established by the administration. Other ASEAN nations that have reached trade deals with the US will face similar rates, including:
- Vietnam: 20%
- Indonesia: 19%
- Philippines: 19%
- Thailand: 19%
- Cambodia: 19%
- Malaysia: 19%
- Singapore: 10%
The new tariff on Thailand, while higher than previous rates, is being viewed by some as a win for the country. The US is Thailand's largest goods export market, and the country had a trade surplus of approximately $40 billion with the United States last year. The reduction from a potential 36% to the current 19% is seen as a major success for the negotiating team.
Crackdown on "Transshipment"
The executive order also includes a particularly stringent provision targeting "transshipment"—the practice of rerouting goods through a third country to evade tariffs. Under this new measure, goods suspected of being "falsified" in origin will be subject to a much higher tax rate.
The "tax rate for rights or passage" for transshipped goods is:
- Vietnam: 40%
- Indonesia: 19% plus retaliatory tariffs from other countries
- Philippines: Not specified.
This crackdown is intended to ensure that the new tariff rates are effective and that countries are not using loopholes to bypass the new trade regulations.
The new tariffs are set to take effect on August 7th. The long-term impact on the economies of the affected nations, and on the US consumer, remains to be seen.
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