Bangkok: Keep an eye on "Section 301" of the US, which may impose double tariffs on Thailand. The Ministry of Commerce stated that the increasingly volatile geopolitical climate is transforming globalization, dividing world trade into four blocs. Thailand should leverage its neutrality to penetrate markets in all sectors. The Ministry is also monitoring the US's use of Section 301 in two cases against Thailand, risking double tariffs, with results expected by July 24th. It recommends reducing reliance on the US and Chinese markets and accelerating expansion into new markets through FTAs. Furthermore, the Ministry noted a surge in BOI (Board of Investment) applications for the data center sector.
According to Thai News Agency, Dr. Kirida Paochit, Assistant Minister of Commerce, delivered a lecture at the 2026 Advanced Economic Capacity Development Program (AECMD), titled "Opportunities and Survival in a Volatile Economic Era Amidst Global Geopolitical Conflicts," on the topic of "Trade and Investment Strategies in the Context of Global Geopolitical Conflicts." Organized by the Economic Journalists Association in collaboration with Bangkok Bank Public Company Limited and the University of the Thai Chamber of Commerce, the lecture stated that the current geopolitical situation, including conflicts and political relations between countries, has resulted in a clear economic polarization of the world. It can be argued that globalization as of the past has ceased. The world is divided into four groups: the US group, the China group, the European group, and a neutral group like Thailand. This leads to trade being increasingly confined within each of these groups.
This change directly impacts the supply chain, requiring it to adapt its traditional form. Thai entrepreneurs therefore need to understand and select the target groups to participate in in order to find business opportunities. "Because we are relatively neutral, we can target each group. The Ministry of Commerce is ready to act as a 'gateway' to enable Thai businesses to access all trade sectors," said Dr. Kirida. However, Thailand is currently facing challenges from the US implementing new tariffs.
Section 301 refers to a trade law used by the United States to accuse trading partners and punish them by imposing import tariffs. Currently, Thailand is being accused in two cases: the Forced Labor Case and the overcapacity case. In the Forced Labor Case, the United States accuses Thailand and 60 other countries of failing to implement measures to prevent the import of goods produced under forced labor. Initially, the US announced it would impose import tariffs of 12.5% on Thailand and 45 other countries, while another 14 countries would be subject to a 10% tariff. The case is currently in the public hearing phase, and a final decision is expected by July 24th.
Thailand clarified to the United States that it is drafting legislation to prevent the import of goods produced under forced labor, which is expected to be submitted to Congress in 2027. It also affirmed that Thailand does not subsidize investment to the point of over-investment and does not have the alleged low or excess production capacity. As for the second case, it remains to be seen as the United States has not yet announced the tariff rates. If both cases are decided, the tariffs will be imposed on top of each other.
Dr. Kirida suggested a strategy to address the situation, stating that Thailand needs to diversify its trade risks by reducing its dependence on the US export market, which currently accounts for 21% or one-fifth of total exports, and reducing imports from China, which currently amounts to 25% or one-quarter of total imports. Furthermore, Thailand should aggressively pursue new markets such as Africa and Latin America, leveraging existing free trade agreements (FTAs) with 18 countries and the three more scheduled to come into effect by 2027.
These agreements include the Thai-EFTA Agreement with the European Free Trade Association group, the Thailand-Bhutan agreement, and the Thailand-Sri Lanka agreement. Furthermore, it was found that businesses receiving investment promotion from the Board of Investment (BOI) in Thailand are shifting towards new-generation industries. The top industry is Data Centers (approximately 20-30 centers), followed by electronics/electrical appliances for the AI industry, utilities, electric vehicles (EVs), and biotechnology. These industries have a high level of local resource and raw material utilization, which will benefit Thai people.