Published: July 14, 2025

US Tariffs: A Looming Challenge for Thailand’s Economy and the Baht

The imposition of US tariffs remains a critical concern, casting a long shadow over the global economy. Specifically, it impacts Thailand’s trade landscape and currency outlook. The US initiated a 30% tariff on goods from the European Union (EU) and Mexico, effective August 1st. Furthermore, President Donald Trump proposed a broader 15% to 20% across-the-board tariff on various countries. This significantly surpasses the current 10% baseline, signaling heightened uncertainty.

Market Volatility and Unsettled Sentiments

The market reaction to these renewed tariff threats has been notably volatile. This reflects a pervasive sense of fragility among investors. The looming August 1st deadline is a focal point. Market participants anxiously await any potential shifts or clarifications.

Thai Baht Gains Strength Amidst Uncertainty (July 14, 2025)

The Foreign Exchange and International Business Department of TMBThanachart Bank (ttb) reported that the Thai Baht opened stronger this morning at 32.44 baht per US dollar. This marks an appreciation from its Friday closing price of 32.52 baht per US dollar. The expected support level for today is 32.30 baht, with a resistance level at 32.60 baht per US dollar.

Key Factors Influencing the Baht’s Trajectory

• US Tariff Concerns: While the immediate concern over tariffs has lent some short-term strength to the US dollar, the overall outlook remains unpredictable.
• US Economic and Labor Market Data: Critical data points include upcoming US economic indicators and labor market strength. Additionally, the latest Federal Reserve (Fed) meeting minutes have tempered expectations for short-term interest rate cuts.
• Foreign Fund Flows and Global Gold Prices: Last Friday, foreign investors net-sold 2.563 billion baht in the Thai bond market. However, they net-bought 2.187 billion baht in the stock market. These capital flows are significant drivers of the Baht’s movement.
• Thailand’s Disadvantageous Position: Thailand faces a considerably higher proposed tariff rate (36%). Regional competitors like Vietnam (20%), Indonesia (32%), and Malaysia (25%) face lower rates. If this 36% rate is indeed implemented from August 1st, it could severely erode Thailand’s export competitiveness. This may potentially lead to a substantial decline in foreign direct investment (FDI) as companies consider relocating production.

Recommended Baht Trading Strategy

For today, the recommended trading range for the Thai Baht against the US dollar remains 32.30 – 32.60. Therefore, a “buy at 32.30 baht / sell at 32.60 baht per dollar” strategy is advised. This helps manage risks associated with market volatility.

The Future of Thailand’s Economy Under US Tariffs

Several economic experts have issued stern warnings about the potential repercussions for Thailand’s economy if the proposed US tariffs are fully enacted. Projections suggest a potential GDP contraction of 1.1%. The National Economic and Social Development Council (NESDC) has also cautioned that Thailand must prepare for a worst-case scenario. In this scenario, exports to the US could be halved, potentially leading to prolonged economic stagnation. For a deeper dive into the broader economic landscape, you might find this article on the Thai Economy in 2025 insightful.

In response, the Thai government has prepared a relief package exceeding 40 billion baht (approximately $1.22 billion). It has also urged the Bank of Thailand to consider a more accommodative monetary policy to mitigate the economic challenges. This aligns with broader concerns discussed in reports such as the one from Prachachat Business regarding the economic outlook.

Conclusion

US tariffs present a significant and ongoing challenge for Thailand’s economy and its currency. Both investors and businesses must remain vigilant. They should closely monitor developments and prepare for continued market fluctuations as Thailand navigates these complex trade dynamics. Ultimately, the effectiveness of ongoing negotiations and domestic mitigation strategies will be crucial in determining the ultimate impact on the nation’s economic stability.