Thread: Thailand and the new coalition government

Trump’s tariff hits Thai businesses hard: Industrial zones and exports face major setback

Thailand faces a 36% tariff from the US starting August 1, impacting industries and exports. The move raises concerns about economic instability and foreign investment shifts.

Thailand’s businesses are bracing for the impact of the US’s 36% tariff, which will come into effect on August 1, 2025. This move is part of the US’s efforts to address the trade imbalance with Thailand and will apply to all products imported from Thailand.

In addition to political instability, Thailand’s economy has been slowing down, with escalating tensions at the Thai-Cambodian border. This development is compounded by the global situation, as US President Donald Trump posted an open letter on July 7 to Thailand's acting Prime Minister, Suriya Jungrungreangkit, addressing trade negotiations between the US and Thailand. Despite a significant trade deficit with Thailand, the US will continue its trade relationship, confirming that the 36% tariff will be imposed, starting August 1, 2025.

“The 36% number is far less than what is needed to eliminate the trade deficit disparity we have with your country,” the letter stated. This announcement has shaken Thailand’s export sector, which feels disadvantaged compared to trade competitors like Vietnam, where tariffs remain lower.

The high tariff rate is expected to impact Thailand's production and export costs, especially with competitors such as Vietnam having a lower tariff. There are growing concerns that foreign investors, particularly from China and Japan, may relocate their production bases to countries with lower tariffs, further weakening Thailand’s manufacturing sector. This poses a particular threat to industrial parks, where foreign investment, notably from China, has been significant, especially in the Eastern Economic Corridor (EEC).

Pornarit Chounchaisit, President of the Thai Real Estate Association, expressed concern that the 36% tariff will severely affect the Thai export sector, which is a key driver of the economy. The higher costs compared to competitors like Vietnam will likely reduce Thailand’s competitiveness.

The situation also raises alarm about the future of foreign investment in Thailand, particularly from China. Many Chinese companies have been purchasing land in Thailand, especially in industrial zones within the EEC. With higher production costs in Thailand, these companies might consider relocating their manufacturing bases elsewhere.

“Thailand has been open to Chinese investment, especially those in grey businesses, as seen in the steel factories with substandard products and cheap goods being mislabelled as Thai exports to the US,” Pornarit said. “This, combined with the situation in Thailand, makes the 36% tariff a crucial factor that could significantly impact the country.”

Paetongtarn vows to fight Hun Sen clip case, insists on reclaiming justice

Suspended Prime Minister Paetongtarn Shinawatra has vowed to fight the case involving an audio clip of her conversation with former Cambodian Prime Minister Hun Sen, Pheu Thai Party’s deputy spokesman Chanin Rungthanakiat said on Tuesday.

He made this statement after a Pheu Thai Party meeting at its headquarters in Bangkok, which Paetongtarn also attended. During the meeting, party members presented her with a bouquet of flowers as a gesture of support.

Chanin explained that Paetongtarn assured the MPs that she remained focused on her work. She reassured them that she was in good spirits and committed to acting with integrity in all matters.

She also pledged to fight the case with full determination to reclaim justice, enabling her to carry out her duties to the fullest extent.

Paetongtarn also reassured her fellow MPs, stating that there was no need for concern during this period, as Phumtham Wechayachai was serving as acting prime minister and would continue to implement policies.

She further pledged to the MPs that this was the time to deliver the party's policies to the public, as they had already secured the ability to form a new Cabinet. This presented an excellent opportunity to use the executive mechanisms to push forward Pheu Thai's remaining policies to the public.

Chanin added that Pheu Thai MPs remained confident that Paetongtarn would overcome these challenges and return to her full duties as soon as possible.

He denied claims that criticism of the current Cabinet's formation was preventing the government from implementing policies, stating that both the executive and legislative branches of the new government were working swiftly and efficiently, with no obstacles or interference between them.

Chanin also addressed concerns about the government's ability to move forward due to the tight majority in the House of Representatives, confirming that they had coordinated with all coalition parties through the government whip mechanism since Monday (July 7).

On July 9, the party would intensify efforts to maintain quorum in the House, as both the executive and legislative branches were crucial to driving forward government policies, he said.

He revealed that on July 9, Pheu Thai would propose a motion to fast-track the bill on referendums, hoping for smooth progress without opposition. If successfully passed, it would lead to the consideration of the referendum bill in the following week, with four draft bills under review. He added that an additional draft proposal from the Bhumjaithai Party may also be presented, which will be included in the discussions.

Chanin concluded that the debate in Parliament would focus on the principles of the bill, leading to the formation of a committee to detail aspects of the amnesty law and its coverage.

Thailand still has opportunity in US tariff talks, Paetongtarn says

Thailand still has the opportunity to achieve success in the US tariff negotiations, suspended Prime Minister Paetongtarn Shinawatra said on Wednesday.

She made the remark after the US submitted a letter reiterating its decision to impose a 36% tariff on Thai goods imported into the US, effective from August 1.

When asked about Thailand's next steps, Paetongtarn stated that the details of this matter should be addressed by Finance Minister Pichai Chunhavajira, who had discussed the letter.

She emphasised that the entire negotiation process must be handled by the government, which will be responsible for negotiating and responding to US President Donald Trump.

“If you ask for my personal opinion, as an ordinary citizen, I believe there is still an opportunity in this matter,” she said, adding that further details should be sought from Pichai.

Paetongtarn pledges 1 trillion baht revenue boost through Thai soft power initiatives

Suspended Prime Minister Paetongtarn Shinawatra has pledged to generate over 1 trillion baht in revenue within the next five years through the global promotion of Thai soft power.

She made this statement during her speech on the topic “Thailand Rising: Tourism, Education, and the New Soft Power Frontier” at the opening ceremony of the SPLASH-Soft Power Forum 2025, held at the Queen Sirikit National Convention Centre in Bangkok on Tuesday.

Paetongtarn, who also serves as Culture Minister, noted that we are currently living in a world that is evolving rapidly and growing more complex than ever before. She stated that we are facing a fragile, worrying, and difficult-to-understand world, one that is increasingly unpredictable.

She stressed the importance of understanding the context of change as the starting point for progress.

“We must understand that everything is subject to change, and we must be flexible enough to adapt to different circumstances. What we once relied on, such as becoming Asia's Detroit automotive hub, or the world’s kitchen, now requires us to adapt,” she said.

Paetongtarn continued, stating that today, Thailand stands at a crossroads where new investments, industries, and technologies will shape the future. She affirmed that the government has already begun laying the groundwork to ensure Thailand's preparedness for the future.

She also highlighted the growing importance of soft power, explaining that the world is no longer just purchasing goods or services, but is increasingly buying experiences and expressions of a country’s unique identity, especially in the case of Thailand, with its rich culture.

This includes Thailand’s cuisine, way of life, and the Thai people, who are globally recognised for their charm, helpfulness, and warm smiles. Paetongtarn emphasised that Thailand should focus on consolidating local cultural goals, categorising them to increase their marketability.

She added that the soft power policy is progressing in a structured manner, with collaboration between the state and private sectors to work towards a common goal, reducing overlap and enhancing global connections.

The focus starts with Thai food, a global favourite. "We are not just selling the taste, but the experience of Thailand," she said. "We aim to elevate Thai cuisine to a global brand and create destinations for travellers.”

This will include Thai Cuisina restaurants, which will encompass every stage of the Thai food supply chain, from regional Thai restaurants to supermarkets selling ready-to-eat Thai food products.

Additionally, the plan includes expanding the distribution of Thai food products internationally through wholesale centres abroad. The goal is to establish these restaurants in major cities around the world.

The tourism sector will also be enhanced to cater to food lovers, offering genuine Thai culinary tourism experiences, including cooking classes and local ingredient tours, while raising the standard of Thai Select certification to match global awards like Michelin Stars, guaranteeing authentic Thai flavours and ingredients.

Paetongtarn outlined plans for Muay Thai to evolve from a sport to a global lifestyle, with Muay Thai bootcamps becoming a new trend promoting fitness, health, detoxification, and mindfulness.

Additionally, she aims to strengthen the professional Muay Thai league and elevate its standards across all dimensions.

The Thai wellness sector is also set to expand, offering a holistic experience combining Thai massage, herbal treatments, healthy food, and meditation, all within a Thai retreat chain.

This will create a comprehensive wellness experience from physical therapy to mental relaxation, setting the standard for Thai spas and therapists.

She added that Thai herbs and massages will undergo medical research to ensure they can be marketed as export products, while promoting professional Thai health massage worldwide.

Paetongtarn also addressed the film industry, saying, "We will support Thai filmmakers to dream and create through experimental spaces like writer’s rooms and creative labs, while investing in technology to produce films that capture Thailand’s unique entertainment style."

The government will also offer cash rebates to support Thai films and attract foreign investment, while promoting the Bangkok International Film Festival as a major global event to foster international film markets.

Lastly, she spoke about the gem industry, one of Thailand's top export sectors, which is driven by the creative skills of Thai artisans.

"Twenty years ago, gemstone exports were worth approximately 50 billion baht, but last year we exported over 500 billion baht—an increase of 10 times. Just in the first five months of this year, exports have already reached 380 billion baht, and the industry employs over 1 million people," she said.

Paetongtarn concluded by outlining plans to train a large number of designers, diamond cutters, goldsmiths, and silversmiths, transforming them from craftsmen into high-value artists.

She intends to use various measures to promote this industry and aims to increase gemstone export value to 1 trillion baht within the next five years.

Xi warned Paetongtarn: drop casino bill or face consequences – Anutin

China’s President Xi Jinping urged Prime Minister Paetongtarn Shinawatra to drop Pheu Thai’s flagship “casino bill”, or to expect negative repercussions on tourism and bilateral trade, former interior minister Anutin Charnvirakul has revealed.

Anutin claimed that Xi raised the issue during a high-level meeting in Beijing.

“The Chinese president made the suggestion to Paetongtarn on three separate occasions during the meeting, which I also attended as interior minister,” Anutin said, adding that he had taken detailed notes, because it involved his ministry.

Xi's statements were also included in the agreed minutes of the meeting.

“President Xi said directly that, if Thailand proceeds with this policy, China would be compelled to introduce countermeasures that would impact Chinese tourism, trade and investment in Thailand,” Anutin noted.

He argued that, while Beijing cannot dictate Thai policy, ignoring such explicit warnings is unwise, adding, “The Thai government’s indifference and its determination to push the bill forward, despite China’s repeated concerns, were bound to affect bilateral ties.”

He pointed to a sharp fall in Chinese tourist arrivals, which are down by more than 90%, as evidence of the consequences, claiming that this had inflicted severe damage on Thailand’s tourism sector, especially businesses reliant on Chinese customers.

“We’re talking about hoteliers, retailers, vendors, restaurants and the service industry at large, many of which are now struggling with debt and loss of livelihoods for the first time,” Anutin said.

Anutin’s revelation come shortly after he withdrew his Bhumjaithai Party from Paetongtarn’s coalition administration and after the Cabinet decided to drop the draft bill on the Integrated Entertainment Complex, widely known as the “casino bill”, from Parliament, citing the bill’s broad social implications, which required more time to instil public understanding.

Although the government moved to withdraw the bill from the House agenda, Anutin described the move as being "too late."

He argued that simply withdrawing the bill, without a clear commitment to permanently abandon the casino initiative, will do little to restore confidence or undo the economic damage already done.

Anutin appealed for the government to prioritise long-term economic partnerships, especially with China.

“If cancelling the bill would help revive Chinese tourism and investment, then that must come first. We must listen to the countries that have stood by us. Thailand and China are as close as brothers, let’s not forget that,” he concluded.

Thaksin stoutly defends Prime Minister Ung Ing and blames the 2017 Constitution for thwarting progress

Former PM Thaksin fiercely defends daughter PM Ung Ing, blames the 2017 Constitution for blocking progress, accuses the Senate of election fraud, warns of political deadlock and vows Thailand will overcome turmoil with new leadership options and bold reforms ahead.

Former Prime Minister Thaksin Shinawatra came out swinging on Wednesday, insisting Thailand is not at a political dead end—and vowing the country will push through its current turmoil. At a press event in Bangkok’s Eastin Hotel, Thaksin defended his daughter, Prime Minister Paetongtarn Shinawatra or ‘Ung Ing’, declaring she had “done nothing wrong.” He also shut down speculation about foreign alliances, making it clear his ties with Cambodian strongman Hun Sen are over. Thaksin saved his fiercest fire for the 2017 Constitution. He blasted it as a straitjacket on leadership, claiming it was written specifically to cripple democratic governments. “They had my face in front of them when they drafted it,” he said.

Former Prime Minister Thaksin Shinawatra made a rare public appearance on July 9. He spoke at an event marking 55 years of the Nation Media Group. The event was titled “Breaking the Deadlock in Thailand.” Thaksin addressed key issues facing the country. These included political gridlock, the Senate’s influence and his daughter’s legal troubles. He also outlined paths forward for Thai democracy.

From the start, Thaksin rejected the idea of a political dead end. According to him, the appearance of a deadlock means someone is obstructing progress. He emphasised that solutions remain possible.

To that end, Thaksin proposed three potential scenarios. First, his daughter, Prime Minister Paetongtarn Shinawatra, could be cleared by the Constitutional Court. If that happens, she could resume full duties. Second, Pheu Thai could nominate Chaikasem Nitisiri as an alternative prime minister. Finally, if both efforts fail, the Deputy Prime Minister, Phumtham Wechayachai, could dissolve Parliament and call new elections.

Thailand's business leaders push for tax-free US goods amid tariff standoff

A top private sector alliance has proposed that the government exempt imports of most US-made products from import taxes—similar to those under free trade agreements—in hopes of prompting the Trump administration to reconsider the 36% reciprocal tariff on Thai goods entering the US market.

Pote Aramwattananont, president of the Thai Chamber of Commerce, led representatives of the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) in a three-hour meeting with Finance Minister Pichai Chunhavajira on Wednesday to discuss Thailand’s tariff proposal, ahead of the third round of negotiations with the US before the August 1 deadline.

Pote said that, under an FTA framework, tariff exemptions on US imports may not cover all US products and the government should be able to manage the impacts of the high tariff imposed by the US, with the hope that it will be reduced to the point that Thai products can remain competitive against those from, for example, Vietnam.

Pichai reportedly told the private sector that he hopes that there will be a third round of tariff talks with the US, adding that Thailand’s revised proposal, sent to Washington on July 6, has not yet received a response.

He said he will consider the JSCCIB’s proposal.

Also on Wednesday, the Thai National Shippers’ Council submitted a list of recommendations for Pichai to consider.

The recommendations include a zero rate on many as US product imports, extensions of Board of Investment incentives for foreign direct investments and increased imports of energy from the US.

Police to submit ‘Hun Sen-Paetongtarn’ audio case to AG on July 14

Somkid files complaint with Cyber Police to take legal action against Hun Sen over ‘Paetongtarn’ audio leak, citing national security concerns.

Pol Maj Gen Sirivat Deepo, Commander of the Cyber Crime Investigation Division 1, confirmed that the investigation into the leaked audio conversation between Cambodian Senate President Hun Sen and Thai Prime Minister Paetongtarn Shinawatra is nearing completion.

The case will be forwarded to the Attorney General on July 14, 2025.

The case stemmed from a complaint filed by Somkid Chueakhong, Deputy Secretary-General of the Prime Minister for Political Affairs from the Pheu Thai Party, who requested the Cyber Police investigate the audio clip on June 20, 2025.

Somkid explained that the complaint was filed to take legal action against Hun Sen on national security grounds. He emphasized that the filing was not an attempt to defend the Thai Prime Minister, but rather to address the political advantage gained by Hun Sen through the leak.

Somkid stated that the leak misrepresented the Thai Prime Minister, leading to a false perception of her weakness in dealing with Cambodia, which damaged Thailand's reputation and violated diplomatic norms. He called for the use of Thai law to address the matter.

Pol Lt Gen Trairong Phiwphan, Commander of Cyber Crime Investigation Buraeu, confirmed that, based on preliminary interviews, the case could proceed under Thai law, regardless of whether the actions took place within or outside the country or involved Thai or foreign nationals. If the actions threaten national security or impact the Kingdom, legal action can be taken.

The case will be forwarded to the Attorney General, as the incident occurred outside Thailand and the suspect is not Thai. The next steps will be for the Attorney General to decide whether to pursue charges. If charges are filed, an arrest warrant will be issued, and Interpol will be contacted to issue a red notice, Sirivat said.

Transport Ministry to seek Cabinet nod for housing lottery under Home for Thais scheme

The Ministry of Transport plans to propose to the Cabinet the launch of a lottery system to allocate the first phase of 5,000 housing units under the Home for Thais scheme, with residents expected to begin moving in by late 2026.

Deputy Transport Minister Surapong Piyachote said that following the recent signing of a memorandum of understanding (MoU) between SRT Asset (SRTA) and the Government Lottery Office (GLO) on the lottery system, the ministry is now working on establishing the criteria for the draw.

“We are preparing to submit the scheme to the Cabinet for approval and aim to begin the lottery process by October this year,” he said.

He added that once the Cabinet gives its approval, the ministry will begin drafting the terms of reference (ToR) for selecting contractors. The construction is expected to commence by the end of 2025, with the first batch of homes ready for occupancy by late 2026.

Transport Ministry to seek Cabinet nod for housing lottery under Home for Thais scheme

Surapong explained that the GLO will be responsible for designing the lottery format and overseeing the process. He stressed that, given the GLO’s long-standing experience with lottery operations, the process will be transparent and verifiable.

However, he noted that the lottery cannot proceed until the Cabinet formally approves the project.

The Transport Ministry estimates that Phase 1, comprising around 5,000 housing units, will require a construction budget of approximately 6–7 billion baht.

Following initial registration for the Home for Thais scheme, some 260,000 people expressed interest, of whom 130,000 have passed the initial screening by the Government Housing Bank (GHB). From this pool, 5,000 names will be selected in the first lottery draw.

Meanwhile, the ministry is preparing to launch Phase 2 of the scheme, which will include approximately 12,000 additional units.

Those who registered for Phase 1 but did not receive a unit will automatically be eligible for future draws, especially for the Bang Sue Km.11 site in Bangkok, which will remain a core location with more than 10,000 units included in every phase of the lottery.

Four pilot locations on land owned by the State Railway of Thailand (SRT) have been designated for development under the scheme:

• Bang Sue Km.11 (Bangkok) – A central city location with strong public transport links. The site is 2.5 km from Krung Thep Aphiwat Central Terminal, 500 metres from Central Ladprao, and 500 metres from Phahon Yothin MRT station.
• Thonburi (Siriraj) site – Located opposite Sala Nam Ron Market and 800 metres from both the Red and Orange Line rail links. The plot spans approximately 23 rai.
• Chiang Rak, Pathum Thani – Situated near the Prem Prachakon Canal Road, the site is 4.4 km from Chiang Rak railway station, Thammasat University (Rangsit campus), and Thammasat University Hospital, and 9 km from Bangkok University.
• Chiang Mai – Adjacent to Chiang Mai railway station on Charoen Muang and Thung Hotel roads. The location is 2.5 km from The Prince Royal's College, 2.6 km from Payap University, 7.5 km from Chiang Mai University, and 1.3 km (or 5 minutes’ drive) from the super highway.