Economy Thailand Rejects 0% Tax Deal with US, Cites Risk to Local Farmers

[webfact]

Picture courtesy of Khaosod

 

Thailand has decisively rejected a 0% tax agreement with the US, citing significant potential impacts on its agriculture sector. The government is instead launching a 200 billion baht (£4.5 billion) soft loan scheme to support private sectors and farmers. Deputy Prime Minister and Finance Minister Pichai Chunhavajira made his position clear amidst rising pressure.

 

Deputy Finance Minister Julaphan Amornwiwat affirmed the country’s firm stance, stating the 0% tax proposal is untenable due to international obligations and the vulnerable nature of the domestic agriculture sector. The 0% tax would necessitate similar concessions from other trading partners, creating a ripple effect that could destabilise local industries.

 

Julaphan pointed to Vietnam’s agreement with the US, which permits exports at a 20% tax without reciprocating the same privilege, as an example of unilateral arrangements. Thailand’s commitment to its Free Trade Agreements with European and Asian nations, along with the Most Favoured Nation principle, makes a similar deal untenable without sparking demands for equivalent treatment from other countries.

 

As diplomatic channels operate, Thailand continues to prioritise its domestic economy. Julaphan emphasised that maintaining the livelihoods of the private sector and farmers is paramount, along with safeguarding these sectors against adverse trade negotiations.

 

To counteract global economic pressures, the government has earmarked a substantial package of 200 billion baht in soft loans. These loans aim to stabilise businesses, ensure continuous farming operations, and protect employment. Julaphan explained that the private sector must adapt to new market realities, with assistance to broaden their market scope being key, reported Khaosod.

 

Julaphan urged local industries to diversify their markets and closely follow global trends, viewing crises as possible opportunities for growth. Attention was drawn to domestic production, indicating that goods benefiting from international tax privileges need to be audited for adequate local content.

 

In his concluding remarks, Julaphan discussed the potential establishment of an entertainment complex, a topic not yet on the Cabinet's agenda. He suggested that a collective understanding is essential before further discussions can progress.

 

  Adapted by ASEAN Now from The Thaiger 2025-07-23

 

 

[vangrop]

Thailand with their exuberant import taxes. Donald Trump made a wake up call for the Thais. 

[smedly]

hilarious, these import taxes protect the cartel that suppies the farmers with fertilizers etc, a lucrative protected business

[watchcat]

2 hours ago, webfact said:

Thailand has decisively rejected a 0% tax agreement with the US, citing significant potential impacts on its agriculture sector.

 

Do they really care about the poor farmers?

 

16 minutes ago, smedly said:

hilarious, these import taxes protect the cartel that suppies the farmers with fertilizers etc, a lucrative protected business

 

[ozz1]

The problem is they think that the world needs Thailand but it doesn't there is a lot of markets selling the same

[KhaoHom]

4 hours ago, webfact said:

Picture courtesy of Khaosod

 

Thailand has decisively rejected a 0% tax agreement with the US, citing significant potential impacts on its agriculture sector. The government is instead launching a 200 billion baht (£4.5 billion) soft loan scheme to support private sectors and farmers. Deputy Prime Minister and Finance Minister Pichai Chunhavajira made his position clear amidst rising pressure.

 

Deputy Finance Minister Julaphan Amornwiwat affirmed the country’s firm stance, stating the 0% tax proposal is untenable due to international obligations and the vulnerable nature of the domestic agriculture sector. The 0% tax would necessitate similar concessions from other trading partners, creating a ripple effect that could destabilise local industries.

 

Julaphan pointed to Vietnam’s agreement with the US, which permits exports at a 20% tax without reciprocating the same privilege, as an example of unilateral arrangements. Thailand’s commitment to its Free Trade Agreements with European and Asian nations, along with the Most Favoured Nation principle, makes a similar deal untenable without sparking demands for equivalent treatment from other countries.

 

As diplomatic channels operate, Thailand continues to prioritise its domestic economy. Julaphan emphasised that maintaining the livelihoods of the private sector and farmers is paramount, along with safeguarding these sectors against adverse trade negotiations.

 

To counteract global economic pressures, the government has earmarked a substantial package of 200 billion baht in soft loans. These loans aim to stabilise businesses, ensure continuous farming operations, and protect employment. Julaphan explained that the private sector must adapt to new market realities, with assistance to broaden their market scope being key, reported Khaosod.

 

Julaphan urged local industries to diversify their markets and closely follow global trends, viewing crises as possible opportunities for growth. Attention was drawn to domestic production, indicating that goods benefiting from international tax privileges need to be audited for adequate local content.

 

In his concluding remarks, Julaphan discussed the potential establishment of an entertainment complex, a topic not yet on the Cabinet's agenda. He suggested that a collective understanding is essential before further discussions can progress.

 

  Adapted by ASEAN Now from The Thaiger 2025-07-23

 

 

 

I'm extremely interested as to which agricultural products he believes threatened. I'm guessing none.

 

Good news ... With more subsidy like 200M + tarrifs looking at much better X rates for us

[StayinThailand2much]

Boo-hoo... All those U.S. beef imports, threatening Thailand buffalo beef... 😆 

[stubuzz]

4 hours ago, webfact said:

The government is instead launching a 200 billion baht (£4.5 billion) soft loan scheme to support private sectors and farmers

If farmers need loans to continue, their business models cannot be sustainable.

[StayinThailand2much]

1 hour ago, watchcat said:

Do they really care about the poor farmers?

 

Of course they do! Always when general elections are around... 😆 

[ozfarang]

That's the problem with Thailand. They have been imposing exorbitant import taxes for decades.

They think it's their god given right, or should I say buddha given right to charge these ridiculously high  taxes.

 

Then came along Donald J Trump to get in the way of their greed

[newbee2022]

4 hours ago, webfact said:

To counteract global economic pressures, the government has earmarked a substantial package of 200 billion baht in soft loans.

I wonder where this money is going to? I'm afraid only those farmers with a high output will benefit. And the rice farmers with only a few paddies?

[bkk6060]

The future here is Chocolate they should concentrate on that.

[nick supreme]

This is an outrageous request from Trump. 

[connda]

Thailand doesn't want a "Free Market."  They want to impose tariffs on others in the name of domestic protectionism while demanding that other countries, like the US, to not levy tariffs on Thailand's products. They want the unfair advantage that they have enjoyed for years to remain.

Global trade should be a level playing field but it's not.  I may not like what Trump is doing, but I understand it and Thailand is a prime example of a country seeking to impose tariffs on US products while enjoying tariff-free exports themselves. 
Read 'em and weep.  Those days are over. 
It would be better to take a zero tariff stance and then subside their farmers.  Instead they are going to enter an unwinnable trade war with the US and they still will subside their farmers. 

[smedly]

25 minutes ago, stubuzz said:

If farmers need loans to continue, their business models cannot be sustainable.

the money farmers get goes where to buy what, who owns the businesses that supply the farmers ???, the whole thing is a giant scam, we can't have farmers buying outside of Thailand for their supplies can we

[connda]

4 hours ago, webfact said:

To counteract global economic pressures, the government has earmarked a substantial package of 200 billion baht in soft loans.

Loans will just destroy Thai business by over-extending them until they go bankrupt.  Deficit spending is untenable.  Eventually you have to pay the piper his due.

[MarkBR]

10 minutes ago, bkk6060 said:

The future here is Chocolate they should concentrate on that.

There is so much potential in crops native to other tropical & subtropical regions of the planet that have great potential in Thailand: cacao being one of them, although they need to focus on Criollo high quality types.  Another is Pilinut (Canarium ovatum) which is commercialised in Philippines, and is better than almonds.  Austrialian natives could be Davidson's Plum (Davidsonia jerseyana) & Riberry (Syzygium luehamnnii) among many that would grow in Thaialand. The list is almost endless & full of possibilities.  

[Lacessit]

30 minutes ago, ozfarang said:

 

Then came along Donald J Trump to get in the way of their greed

Hilarious. Donald Trump and greed is a classic tautology.

[frank83628]

7 minutes ago, smedly said:

the money farmers get goes where to buy what, who owns the businesses that supply the farmers ???, the whole thing is a giant scam, we can't have farmers buying outside of Thailand for their supplies can we

Conspiracy theorist . Com

[connda]

33 minutes ago, stubuzz said:

If farmers need loans to continue, their business models cannot be sustainable.

Exactly.  Shouldering farmers with more debt to compete in an unwinnable trade war is unsustainable.  Thai farmers will lose as they are competing against mega-corporations.  Eventually Thai farmers go broke, sell their land for satang on the baht, as large corporations roll in.  If you ask me - that IS the plan. Smart farmers will turn to boutique farming and will control the both the farming and distribution system from the ground to the either the retail end-point or directly to consumers.  Small farmers will go underwater and be bought out.  Thailand would be better off to go Zero Tariffs and 100% free trade and let the chips fall where they may.  Thailand needs to promote what it is good at selling.  Protecting small crop family farmers is a dead-end.  It's just a matter of time before corporations control all but "boutique farms." 

I have no sympathy for Thailand which has enjoyed decades of unfair tariff advantages.  Now it's time to pay the piper his due. Those days are over.

[thesetat]

I guess thailand will be losing a lot of exports. 

[JimHuaHin]

Thai government concerned about poor farmers?

 

Or government advised to be concerned about the giant powerful agribusinesses?

[connda]

6 minutes ago, MarkBR said:

There is so much potential in crops native to other tropical & subtropical regions of the planet that have great potential in Thailand: cacao being one of them, although they need to focus on Criollo high quality types.  Another is Pilinut (Canarium ovatum) which is commercialised in Philippines, and is better than almonds.  Austrialian natives could be Davidson's Plum (Davidsonia jerseyana) & Riberry (Syzygium luehamnnii) among many that would grow in Thaialand. The list is almost endless & full of possibilities.  

What is stupid is the why Thai farmers grow crops.  Somchai grows lamyai and makes money.  So all the farmers in Somchai region grow Lamyai driving the price to Lamyai bought by middlemen to absurdly low levels.  Small farmers need to really begin to get smart.  Grow what other are not growing. Work with other farmers in cooperatives to cut out the middlemen and sell directly to corporate buyers and leverage the power of the cooperative. If regional farmers all bail in to the same freaking crops - move to a different crop. Control supply and distribution or die. 

[MarkBR]

9 minutes ago, MarkBR said:

There is so much potential in crops native to other tropical & subtropical regions of the planet that have great potential in Thailand: cacao being one of them, although they need to focus on Criollo high quality types.  Another is Pilinut (Canarium ovatum) which is commercialised in Philippines, and is better than almonds.  Austrialian natives could be Davidson's Plum (Davidsonia jerseyana) & Riberry (Syzygium luehamnnii) among many that would grow in Thaialand. The list is almost endless & full of possibilities.  

Another Davidson's plum is D. pruriens.

Thought of some nut trees suitable for Thailand: Brosimum alicastrum (Ramon/Mayanut), Terminalia cunninghamii (Pindan Walnut), Vitelllaria paradoxa (Sheanut).

[connda]

10 minutes ago, frank83628 said:

Conspiracy theorist

That term should be eliminated from the English language.  People who use the term are low-intellect morons.  If the shoe fits, wear it.

[HappyExpat57]

4 hours ago, vangrop said:

Thailand with their exuberant import taxes. Donald Trump made a wake up call for the Thais. 

I pretty much detest that buffoon masquerading as the US president, but on this one he is right. Anyone who has lived here on a permanent or semi-permanent basis feels Thailand's unfair business practices when dealing with any imported goods.

[connda]

18 minutes ago, MarkBR said:

Another Davidson's plum is D. pruriens.

Thought of some nut trees suitable for Thailand: Brosimum alicastrum (Ramon/Mayanut), Terminalia cunninghamii (Pindan Walnut), Vitelllaria paradoxa (Sheanut).

Given the prices of cacao globally, cacao would be a good choice of crop.  But farmers need to join together in cooperatives in order to leverage the supply and distribution, and to negotiate prices with commodity end-points.  If Thailand wants to support their farmers, they need to put their money into creating commodities markets linked to the SET, similar to the CME in the US where farm products can be traded and hedged, with distribution on the international stage that is capable of moving international commodity prices.  Thailand - unfortunately - is still in the feudal era with it's farming, and big-wig politician protect large corporations while p*ssing on the small farmers.  Either form into cooperatives and trade unions or die.  

 "We'll offer loans to farmers who can't pay them, then allow large player to come in and gobble them up, after which corporation_X will kick-back a sh*t-ton of money to yours truly to support my, errrr, political campaign funding." 

Here's reality:

[captain_shane]

35 minutes ago, connda said:

What is stupid is the why Thai farmers grow crops.  Somchai grows lamyai and makes money.  So all the farmers in Somchai region grow Lamyai driving the price to Lamyai bought by middlemen to absurdly low levels.  Small farmers need to really begin to get smart.  Grow what other are not growing. Work with other farmers in cooperatives to cut out the middlemen and sell directly to corporate buyers and leverage the power of the cooperative. If regional farmers all bail in to the same freaking crops - move to a different crop. Control supply and distribution or die. 

These people have very little education, they don't understand asymmetric competitive advantages like that. Education is horrendous in this country, and none of these other schemes matter until they improve it.

[StayinThailand2much]

1 hour ago, ozfarang said:

That's the problem with Thailand. They have been imposing exorbitant import taxes for decades.

 

Yes, if they do it, it's okay, but not if other countries reciprocate...

[smedly]

the farmers do all the hard work earning very little for it, the big prophets go to those that supply the farmers and those that buy their produce, it is set up that way by big money