Shipments of Thailand’s automobiles and auto parts are unlikely to face penalty tariffs by the US because the export values are deemed insignificant.
Auramon Supthaweethum, director-general of the Trade Negotiations Department, said Thailand’s auto exports made up just a 0.1% market share, or US$231 million (7.36 billion baht), out of total US imports worth $208 billion in 2018. Shipments of Thai auto parts excluding rubber products represented a mere 0.9% or $1.3 billion of total US imports worth $139 billion in 2018.
On May 23, 2018, the US Commerce Department initiated a Section 232 national security investigation into imports of automobiles and auto parts.
Similar to an earlier investigation of steel and aluminium imports, which led to a steep hike of 25% tariffs on steel and a 10% tariff on aluminium imports last year, the probe will determine whether imports of automobiles, including sport-utility vehicles, vans and light trucks, as well as auto parts, threaten national security. The US has finished the investigation and made recommendations to US President Donald Trump.
On May 17 this year, presidential proclamations on adjusting imports of automobiles and automobile parts into the US were issued. The department cited the report, which found that American-owned automotive R&D and manufacturing were vital to national security. But increases in imports of automobiles and automobile parts, combined with other circumstances, have over the past three decades given foreign-owned producers a competitive advantage over US-owned producers, the report said.
Ms Auramon said Mr Trump ordered the US Trade Representative to negotiate with the EU, Japan and other countries to consider measures to reduce or limit the export of automobiles and auto parts and report the results within 180 days, before tariffs were raised to 25% from 10%.
“While the USTR is in talks with the target countries, Thailand needs to closely follow up the situation. We expect Thailand is unlikely to be included in the penalty list.” she said.