Economy Thai Rice Exporters Tackle New 19% US Tariff

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Thailand's rice exporters are navigating new challenges as a 19% US import tariff takes effect today. Despite the potential hurdles, industry leaders are voicing moderate concern, emphasising broader market dynamics over the immediate impact of the tariff.

 

The new duty, signed into effect by US President Donald Trump, marks a reduction from a previously proposed 36% rate. While the tariff imposes additional costs on Thai rice, including the highly prized jasmine variety, it's not seen as a critical blow. Thailand currently dominates the US market for premium jasmine rice, enjoying a substantial market share.

 

Charoen Laothamatas, president of the Thai Rice Exporters Association, shared his views with local media outlet "Thansettakij." He clarified that the 19% tariff doesn't significantly disadvantage Thailand compared to Vietnam, a key competitor. Vietnamese rice faces a similar tariff of 20%.

 

Charoen explained that while the new tariff might slow Thailand's market share erosion to Vietnamese rice, a more pressing concern is the potential for increased Vietnamese production. "If Vietnam manages to increase its production tenfold, making rice cheaper, Thailand will lose more market share," he warned. The dynamics of rice pricing are complex; higher prices can lead to competitiveness issues if rivals offer lower-cost alternatives.

 

Beyond tariffs, the global rice market faces challenges such as oversupply. This imbalance could influence prices and demand across international markets, adding another layer of uncertainty for exporters. As Thailand assesses its strategies, balancing competitive pricing with market sustainability remains key.

 

Attention is also turning towards Japan, a significant import partner for Thailand. Japan imports about 300,000 tonnes of 5% white rice annually from Thailand. However, there is rising concern over Japan's import preferences potentially shifting towards the US. Such a shift could reduce Thailand's export volume, especially impacting the staple 5% variety, although jasmine rice volumes to Japan remain low.

 

Charoen stressed that Thai exporters must adapt to these changes dynamically. While tariffs are part of the global trade landscape, maintaining competitive pricing and exploring new markets could mitigate their effects. He believes the global free trade environment may undergo significant shifts in the future, requiring businesses to stay agile.

 

Thailand's rice sector is vital for the economy, with exporters continually exploring ways to enhance competitiveness. The focus includes examining production efficiencies and potentially diversifying into markets less affected by US tariffs.

 

While today’s tariff introduction poses challenges, it’s merely one part of a multifaceted global rice market scenario. Thai exporters are cautiously optimistic, acknowledging that while immediate impacts may be limited, strategic vigilance is necessary to navigate ongoing changes and remain competitive on the world stage.

 

Amid these issues, the industry remains united in its commitment to sustaining growth and ensuring that Thailand retains its position as a top rice exporter, even in evolving market conditions.

 

  Adapted by ASEAN Now from The Nation 2025-08-01