JSCCIB: 36% Trump tariff could shrink Thai exports by 2%, GDP to 0.7%
JSCCIB cuts Thailand’s 2025 GDP forecast to 2.0–2.2% amid trade war risks, warns that if the US imposes a 36% tariff on Thai imports, exports could shrink by 2% and GDP growth may slow to just 0.7–1.4%. The committee urges the government to lower domestic business costs, mitigate the impact of the strong baht, and expedite negotiations with the US to ensure tariff competitiveness with regional rivals.
Kriangkrai Thiennukul, Chairman of the Federation of Thai Industries (FTI), in his capacity as Chair of the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB)—comprising the Thai Chamber of Commerce, the Federation of Thai Industries, and the Thai Bankers' Association—announced the outcomes of the committee’s May 2025 meeting.
The JSCCIB has revised down its projection for Thailand's GDP growth in 2025 to 2.0–2.2%, from the previously forecasted range of 2.4–2.9%. The downgrade is primarily attributed to the escalating trade war and tariff hikes imposed by the United States, which have begun to significantly impact Thai exports.
The intensifying trade conflict is also affecting the global economy. The International Monetary Fund (IMF) has downgraded its 2025 global GDP growth forecast to 2.8%, down from 3.3%, and warned that rising protectionist measures could restrict global trade volume growth to just 1.7%—a level even lower than during the European sovereign debt crisis in 2011.
Additionally, key economies such as the US and China are showing signs of weakness, highlighting global economic vulnerabilities.
The JSCCIB meeting assessed that the US tariff hikes will have a considerable negative impact on Thailand’s export sector, particularly if retaliatory tariffs at a rate of 36% are imposed. Under such a scenario, Thailand could suffer an estimated cumulative export loss of 1.4 trillion baht over the next decade.
This would place significant pressure on vulnerable sectors, affecting approximately 3.7 million workers and nearly 5,000 SMEs with limited capacity to adapt.
In a more moderate scenario, where Thailand faces a 10% retaliatory tariff in Q2 2025, and that rate persists through the second half of the year, export growth for the full year is expected to slow to 0.3–0.9%, down from a previous estimate of 1.5–2.5%. Consequently, GDP growth would be limited to 2.0–2.2%.
However, if the 36% tariff is enforced in the second half of the year, GDP growth in 2025 could fall further to just 0.7–1.4%, and annual export growth may contract by as much as -2%. In the worst-case scenario, the trade war could create a substantial income gap of up to 1.6 trillion baht over the next five years.
“The JSCCIB strongly emphasizes the urgent need for Thailand to engage in negotiations with the United States to de-escalate tariffs and concurrently enhance the competitiveness of Thai businesses,” said Kriangkrai.
The JSCCIB has expressed its support for the government’s efforts to mitigate the risks of trade diversion resulting from US retaliatory tariffs. In particular, it advocates the use of safeguard measures to counter a potential surge in imports that could harm domestic producers.
The committee also recommends the integration of import-export data using e-Government systems to enhance monitoring, analysis, and responsiveness. This would allow authorities to promptly launch investigations should irregular imports increase be detected.
The meeting also addressed the issue of origin fraud involving goods exported from Thailand to the US market. In collaboration with the Ministry of Commerce, FTI, and the Thai Chamber of Commerce, the JSCCIB agreed that the Department of Foreign Trade should serve as the sole authority for issuing Certificates of Origin (Form C/O) for 65 high-risk items—an increase from the previous list of 49 items.
Kriangkrai emphasized that, beyond negotiating lower tariff rates with the US, Thailand must also monitor the trade negotiations of key competitors such as Vietnam, Indonesia, and Malaysia. Should these countries secure better tariff concessions, it could adversely affect the competitiveness of Thai exports in the US market.
On a more optimistic note, signs of renewed trade talks between the US and China are viewed as a positive development for global trade.
However, the rapid appreciation of the Thai baht, now trading in the range of 32.5–32.7 baht per US dollar, has raised concerns. The JSCCIB considers this rate stronger than what is sustainable for Thai businesses, particularly when compared with regional competitors.
The committee urges the government to manage the exchange rate to prevent excessive or abrupt fluctuations and to engage in proactive communication to help businesses adapt accordingly.
Additionally, it recommends that benefits from a stronger baht—such as reduced energy and raw material import costs—be systematically passed on to the manufacturing sector and the general public.
Kriangkrai further stated that the private sector is calling for short-, medium-, and long-term economic stimulus measures, especially after multiple economic research institutions have revised Thailand’s growth projections significantly downward. In the short term, financial injections into the economy are deemed necessary.
Going forward, Thailand must undertake serious structural economic reforms, increase reliance on emerging export markets, accelerate free trade agreement (FTA) negotiations, and pursue membership in strategic economic blocs such as BRICS, to enhance resilience and competitiveness.
