The US is introducing new tariffs – how will Thailand and the countries in Southeast Asia be affected?

On April 2, 2025, US President Donald Trump announced that USA facing a new customs strategy based on reciprocity – a dramatic change that is already provoking strong reactions around the world. The aim is to rebuild the US industrial base, reduce the trade deficit and strengthen the country's economic sovereignty.

The first measure is a general tariff of 10 percent on all imported goods, which will take effect from April 5. Shortly thereafter, from April 9, higher tariffs will be imposed on countries with which the United States has large trade deficits – so-called “reciprocal tariffs” – where the tariff rate reflects half of the receiving country’s tariffs against the United States.

Thailand receives a 36 percent tariff – but why?

Thailand is one of the countries directly affected by these new measures. Under the new US tariff model, Thai goods will be subject to a 36 percent tariff – based on the US estimate that Thailand imposes an average tariff of 72 percent on American products. That is a remarkably high figure.

The reason for these figures varies from sector to sector. Trump's speech specifically mentions that Thailand, like several other countries in the region, has long had very high tariffs on motorcycles, for example – up to 60 percent – ​​while the US has only levied around 2,4 percent in equivalent import duties.

High tariffs in the region: Vietnam, Cambodia and Indonesia stand out

Thailand is not alone. Vietnam is now being hit with a 46 percent tariff – in response to the country’s tariffs of up to 90 percent on US goods. Cambodia is even higher, with a US tariff of 49 percent, and Indonesia is facing 32 percent. These tariff levels are based on the fact that, according to the US, these countries have used a combination of high monetary tariffs, technical barriers to trade and indirect taxes such as value added tax (VAT) subsidies for decades to protect their own industries.

The Trump administration also points to non-monetary barriers such as mandatory local production, double testing requirements, exclusion from government procurement and regulations that disadvantage foreign companies. Such barriers are considered particularly common in countries such as Japan and South Korea, which has also led to Japanese products now receiving a 24 percent tariff.

The following are the tariff rates that the United States is now imposing on goods from these Southeast Asian countries, based on each country's average tariffs against the United States:

1. Cambodia – 49%
2. Burma (Myanmar) – 44%
3. Laos – 48%
4. Thailand – 36%
5. Vietnam – 46%
6. Indonesia – 32%
7. Philippines – 17%
8. Malaysia – 24%
9. Brunei – 24%
10. Singapore – 10% (no additional duty – US minimum applies)

Note: Some other countries in the region are missing from the data or are outside the tariff adjustments (for example, island nations such as Timor-Leste and smaller territories).

What does the US want to achieve?

President Trump describes this as a response to a long-standing “economic abuse” of American industry. He argues that American companies and workers have been forced to compete on unfair terms for decades, and that these tariffs will force other countries to more equitable trading terms – or to relocate production to the United States. He urges manufacturers: “You want to avoid tariffs? Build your factory in America.”

Economic consequences for Southeast Asia

For countries in Southeast Asia that are heavily dependent on exports to the US, particularly in electronics, vehicles and textiles, this could be a serious shock. This is not least the case for Vietnam, which has become one of the largest suppliers to US retailers over the past decade. Malaysia, Indonesia, the Philippines and Cambodia could also be hit hard if US importers start looking for suppliers with lower tariffs or relocate production.

Thailand has strong exports of cars, electronics and agricultural products to the US, and the tariff hike risks negatively impacting these sectors. At the same time, it could also represent a strategic crossroads – either negotiating new agreements with the US or increasing trade within the region and with China, the EU and other markets.

What happens next?

The Trump administration has announced that the tariffs will remain in place until countries show a willingness to change their trade rules and reduce the imbalance. Countries that lower their own tariffs or increase imports of American goods may eventually have their tariffs lowered again.

At the time of writing, no countries in Southeast Asia have officially responded with their own tariffs, but analysts warn that a full-blown trade conflict could escalate quickly if the parties do not begin negotiations.

Text: The editorial staff

Image license: Gage Skidmore, Flickr, original image