Thailand Defends Its Industrial Capabilities Amid US Tariff Negotiations

Kuala Lumpur, Sept 21 (KUNA) -- Thailand defended its industrial capacity against the United States on Monday by presenting new production data for the automotive, auto parts, machinery, and rubber products sectors, in response to a U.S. probe into overcapacity and concerns that other countries are re-exporting their goods through Thai territory.

Arada Ruangthong, Director-General of Thailand’s Department of International Trade Promotion, told the Bangkok Business News that the new data showed the three sectors were operating at capacity utilization rates between 75 and 90 percent, compared with previous figures cited by the U.S. side that indicated a national average below 60 percent.

She noted that Thailand had raised questions about the accuracy of the data during its discussions with the United States regarding investigations by the Office of the U.S. Trade Representative (USTR) under Section 301 of the Trade Act of 1974, which focus on overcapacity in the manufacturing sector.

Regarding tariffs, Ruangthong said that the U.S. hearing and considering the new data does not automatically lead to changes in tariff measures. The final decision rests with President Donald Trump and on the outcomes of negotiations on a reciprocal trade agreement between Thailand and the United States. She emphasized that the capacity data serve as supporting information for negotiations rather than a decisive factor on their own.

Deputy Prime Minister and Commerce Minister Suvajee Suthumporn said that shortcomings in the current industrial production index had contributed to allegations that Thailand was being used as a transshipment hub for re-exporting goods. She explained that the index’s calculations still included industries that had ceased operations while excluding new industries that had entered Thailand’s manufacturing structure.

Suthumporn added that the Ministry of Industry was working to update the industrial production index to reflect the sector’s current structure, and that Thailand had provided the United States with detailed information to demonstrate that the three sectors under investigation were not involved in re-exporting products from other countries.

The USTR investigation covers 16 trading partners, including Thailand, and focuses on what Washington describes as actions, policies, and practices that contribute to structural overcapacity in industrial production. The United States considers this overcapacity an obstacle to reshoring production to its territory and a source of pressure on American industrial jobs.

During negotiations with the United States, Thailand is seeking to keep tariffs within the previously discussed framework of 19 percent and to avoid imposing duties on its products that exceed those applied to competing goods from other countries in the region, given the potential impact on orders, investments, and domestic production. (End)