US Arms Deals Could Trim Thailand's Trade Surplus

To reduce the trade deficit that prompted President Donald Trump to impose a 36% tariff on Thai exports, Thailand might want to purchase additional military equipment and arms from the U.S., according to the Federation of Thai Industries (FTI).

The suggestion was put forward on Friday at a gathering of delegates from 47 sectors under the FTI, discussing strategies to address Washington's upcoming tariff policy set to be implemented on April 9.

"If the government opts to purchase U.S.-made military technology, it could considerably diminish the nation's trade surplus since such items tend to be costly," stated Kriengkrai Thiennukul, chair of FTI, after the meeting.

The technologies are essential for the Thai military as well.

Trump announced the stiff tariff on Thai exports mainly because the country's trade surplus with the US was the 11th largest globally in 2024, at more than $35 billion, or 1.2 trillion baht.

In addition to buying weapons, companies might assist by sourcing certain agricultural raw materials from the United States. Although this approach would require more time to reduce the trade imbalance, Mr. Kriengkrai suggested this as an option.

Moreover, officials would need to consider how importing additional raw materials could affect Thai farmers, he stated.

The FTI has asked representatives of 47 industries to submit additional details about the impact of the new tariffs within one week in order to find appropriate solutions.

Trump also announced a 25% tariff on foreign car and auto parts imports. The levy on cars took effect on April 3, and is scheduled to be applied to nearly 150 auto parts categories in early May, according to media reports.

Thailand supplies automotive components to Ford Motor’s assembly facilities in the U.S., as these imported parts cost less compared to those manufactured domestically.

'Trump's tariff policy is also aimed at prompting US firms outside the US to relocate their production facilities back to their homeland,' said Mr Kriengkrai, referring to a comment made by a representative from Ford Thailand during the meeting.

'That's not easy because it could take 1-2 years.'

Nipatsin Yimyam, chairman of the FTI's Petroleum Exploration and Production Industry Club, said members were preparing to propose that Thailand purchase more fuel, notably liquefied natural gas, from the US, in an effort to solve the trade imbalance.

According to him, the club anticipates that the new tariff will lead to a 1% decrease in Thailand's GDP, which equates to approximately 1.7 trillion baht.

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