The shock, chaos and negotiations behind Thailand’s trade agreement

When US President Donald Trump announced his dramatic rates on April 2, there was no shock anywhere compared to South -East Asia, whose views of the whole world and financial models have been built on exports.

Electronics exporters from Thailand and Vietnam to Chip manufacturers in Malaysia and clothing factories in Cambodia increased by 49% to 49%.

“I remember getting up in the morning. It happened very early and I thought he was standing with his board on the Lawn of the White House: ‘I see it right?%36%? How could it be?” Richard Han says, whose father, one of the biggest contract manufacturers in Thailand, established Hana Microelectronics.

Thailand, which charges% 36%, now has a contract to reduce the rate by up to 5%, just like most of its neighbors.

Trump went to the negotiation wire two days before the deadline fixed by Trump on August 1. This is a perfect process of coming there and there is still very few details on what has been agreed.

Asian regional groups of South -East -Asian regional groups exported $ 477 billion ($ 330 billion) to the United States in 2024 in 2024. Vietnam is the highest economy, the US exports, 30% of the total GDP.

The Vietnamese government then was first outside the block to talk to the United States, and was the first part of the region to reduce the rate of 46% imposed by Trump.

According to the President of the United States, The contract rate reduces the rate of up to 20%, He claims that Vietnam has no longer imposed any rates on any US imports. Obviously, the Vietnamese leaders did not say anything about this agreement.

There are no details, no written or signed documents, and some reports indicate that Vietnam does not agree with Trump’s number. But they set the bar for other countries in the region.

Indonesia and the Philippines reduced their rate reduction deals to 5 %, although no country depends on US exports.

Thailand exports a lot in the United States. Last year, he earned more than $ 63 billion more than the fifth fifth of the total exports. Thailand too should be in the queue in Washington, and Trump requested to cut the% 36% rate for it.

But not Thailand Vietnam, is a party communist state where serious decisions can be taken by some leaders, no need to worry about business or people’s opinion.

Instead, like South Korea and Japan, whose deals, despite a lot of conflict with a staunch American friend, Thailand also has to fight with domestic politics and people’s opinion. There is also a weak and imaginary front government in Thailand, which looks at the category of inherent interests.

The worst thing is, these decisions that were unanimous to trade completely.

In February, US Secretary of State Market Rubio rejected the warning. A Thai trade officer official told the BBC that the US talks are still bringing Ugers as a complaint of Tariff Talk in May.

Later, a regional army commander lodged a complaint against the US educational complaint, resulting in being jailed and then forced to leave Thailand. So, away from the front, Thailand found himself in the back of the queue.

The second problem with the Thai Trade Team was asking the United States in exchange for reducing rates, especially in Thailand’s agricultural market, which is widely protected.

Food is a big business in Thailand. CP Group, one of the world’s agricultural business giants, is the largest company in the country. The US demand for Thailand was painful.

“Vietnam opened the Pandora’s box,” another Thai trade official says. “By giving them zero percent rate on all our imports, they make it difficult for those who cannot easily open all areas in our competition.”

An important business in Thailand – at Nakhon Naik, a three -hour drive from Bangkok, Warawut Siripun has put 12,000 pigs to 12,000 pigs; Thai eat a lot of pork. He is active in the Thai Swine Raisers Association and is lobbying against removing prices on the US pork.

“American farmers produce much larger than us and their costs are low. Therefore, their pork meat will be reduced and domestic farmers will not be able to survive.”

Access to the agricultural market was an important issue of negotiations with Japan, who tried to protect his rice farmers and is one of the main obstacles with India.

In Thailand, it is believed that agricultural guides like CP have lobed against the US demand for opening other areas like Poultry and Corn. The BBC has learned that there have been stringent meetings between the trade team and the cabinet minister after the tariff discussion in Washington.

But on the other hand, Thailand is a manufacturer, who contribute greatly to GDP in GDP as farming. They need a badly agreement.

“If we get% 36%, it is going to be terrible for us,” said SK Polymer Deputy Managing Director Super Suwanpimolkul before the agreement was announced. The company creates a wonderful array of components of the washing machine, fridge, air conditioner and components of synthetic material.

They said, “I guarantee that you will get at least one product in your home.”

SK Polymer was founded in 199 199 by the Supper and his two brothers. His story is the story of modern Thailand, which has emerged from his father’s small family business, but the world of world trade, which is the foundation of Thailand’s economy, is on the rise.

They are an integral part of a complex supply chain, where their products are involved in other components in multiple countries to make customers, industrial or medical items for export. About 20% of the company’s income comes to the United States, but when the products containing ingredients are included, this number is higher. Trump’s rates have thrown a spanner at work.

“We have small margins,” said Super. They said they could still manage up to 20% or up to 25% by reducing the costs. When he spoke to the BBC, he said the agreement was the biggest challenge that uncertainty was the biggest challenge: “Please – just get the contract, so that we can plan our business.”

A large industry in Thailand is also delicious 20% of electronic manufacturers.

Richard Han, CEO of Hana Microelectronics, says, “If everyone in this region is about 5% end, our buyer will not look for alternative suppliers – it is just a tax like VAT.

Shri Han says about 12% of his products go directly to the United States, but like SK polymer, the proportion of indirectly as part of other manufactured goods is very high. But this is not the only rate number to worry about it.

Its concern is a transition, the United States alleges that China is avoiding fees by running its production through South-East Asia. According to President Trump, Vietnam will already pay 40% – the new rate doubles – on the US judges on the transfers.

After the first Trump’s tenure, both Thailand and Vietnam have significantly increased foreign investment and their exports to the United States increased. Some of those Chinese companies move production; There were products that use some more Chinese-made ingredients. And they are not just China.

The second electronics manufacturer, the SVI slip down the robots assembly line and brought hundreds of small elements to combine the circuit boards in the machine with hundreds of thousands of dollars. The ingredients from Malaysia, Philippines, Taiwan and China were seen on the labels.

SVI safety cameras, besoppoc amplifiers, make medical equipment, which are mainly in scandinavia, according to any specificity they want. Thailand’s significant manufacturing sector is part of a very complex global supply chain that is almost impossible to re -arrange for the President of the United States to meet the demands of the United States.

According to the WTO rules, the iphone will be something different when the iPhone is combined with 40% of its value in the local production process or “largely converted” to the new product.

The Trump administration did not pay attention to the WTO rules and it was not clear what would be counted as a trans-shipping, but Mr Han fears that if the United States insists some local elements or some people in China, this will prove a bigger problem for Thai companies than the standard rate rate.

“South East Asia depends a lot to China,” explains. “China has the largest supply chains for electronics and many other industries so far and are the cheapest.

“We can buy materials from the other part of the world. This will be very expensive. But say 3-60%to Thailand or Vietnam or Philippines or Malaysia in that country.

At the moment very few information has been revealed. Despite the claim that the Philippines and Indonesia have received a zero percent rate for the US goods, President Trump has said that it is not right and still needs to be talked about.

The Thai government started so late and struggled to meet the demands of the United States, only one agreement would have given a relief.

Later, by creating details, you will worry about how to work with the contract, which usually takes years. And they are alone in it – the rich and developing economies are shouting at Trump’s Merkurial Tariff Policy.

“Sometimes it has to wait. Of course it has to stop?” Sri Han says. “The problem is, we do not know what the rules of the game are going to happen, so we are all doing milling around, waiting for how to play a new game.”