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A key meeting between “Team Thailand” and the United States is scheduled for this week to iron out the details of new rules of origin, a crucial issue following the US’s decision to slap a 19% tariff on Thai goods.<\/p>\n
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While the 19% rate is more favourable than many had feared, a new, more serious concern has emerged: a potential 40% tariff on goods that fail to meet strict new local content requirements.<\/p>\n
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This measure, aimed at preventing other nations from transshipping their products through Thailand to avoid higher tariffs, is a major sticking point in ongoing negotiations.<\/p>\n
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The US is pushing for a minimum of 60% of a product\u2019s value to originate from within Thailand to qualify for the standard 19% tariff.<\/p>\n
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A source from the Thai government revealed that Team Thailand will argue for a 40% local content threshold.<\/p>\n
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However, the US is holding firm on 50-60%. The Ministry of Commerce expects clarity on the final figure by the end of August 2025.<\/p>\n
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Pichai Chunhavajira, the Deputy Prime Minister and Finance Minister, confirmed that no final decisions have been made on which product categories will be affected.<\/p>\n
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Speaking at a recent seminar, Poj Aramwattananont, chairman of the Thai Chamber of Commerce, warned that a 50% local content requirement would be a severe blow.<\/p>\n
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“If Thailand is hit with a 50% local content requirement, many of our industrial sectors will not survive,” he stated, adding that the US is expected to apply the same rate to all countries.<\/p>\n
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