The government to proceed cautiously rather than rushing into retaliation against the United States' reciprocal tariff measures, experts say.
Thailand, which has been hit with a 36% reciprocal tariff, is among several countries now lining up to negotiate with the US for a possible reduction in the rate.
The government says Washington has responded to Bangkok's request for negotiations, but no specific position in the negotiation queue has been provided yet.
Somjai Phagaphasvivat, an independent political and economic analyst, said the government must develop a strategic and measured response.
The government appears to be adopting a wait-and-see approach where the US may bear the brunt of its own aggressive trade policy, he said.
A 90-day pause in higher tariffs imposed on several countries, including Thailand, announced by US President Donald Trump, is a sign the US may be reassessing the impacts of its trade measures, he said.
In the face of tariff hikes, a country can adopt four strategic responses: prepare and act quickly, as Vietnam and Cambodia have done; retaliate immediately, the way China has; prepare and wait for clarity; and wait for the US to feel the effects of its own measures.
However, there is uncertainty about whether import taxes could be cut or raised even higher. If the hefty tariffs proposed are eventually implemented, Thailand could find itself at a disadvantage, the analyst said.
"The US imposes different tariff rates for different countries. If our competitors have already negotiated lower tariffs while we haven't, our exports could be hurt badly," he said.
Caution, not retaliation
Mr Somjai responded with caution when asked whether the US' trade policy marks the beginning of a full-scale global trade war.
Describing it as a trade conflict, he said the situation has not reached the point of a global trade war, or a repeat of the 1929 Great Depression, a severe global economic downturn that is being talked about.
At that time the situation involved a 90% drop in stock markets, and it took two decades to solve the crisis.
It was followed by World War II and creation in 1944 of the International Trade Organisation, which later evolved into the General Agreement on Tariffs and Trade (GATT) to govern international trade.
He said the US is playing a classic "chicken game" in which countries with small leverage are likely to bow to US trade pressure. However, major players like the European Union (EU) and China are unlikely to cave in.
China, which faces a 125% rate will hit back with high tariffs to send a strong message that if this game continues, it will be disastrous for both sides, he said.
"The US president is himself under increasing domestic pressure. Markets in the US lost US$9.5 trillion in just three days, about half of GDP. Mr Trump won't go off the cliff either, which could lead to negotiations," Mr Somjai said.
Last Friday, Beijing increased its tariffs on US imports to 125%.
Mr Somjai expressed scepticism that Asean would come together and negotiate with the US as a bloc, saying Asean is a loosely bound body and is unlikely to confront the US, especially when Mr Trump threatened to intensify measures against countries challenging him.
Asean, collectively the fifth largest economy in the world, expressed deep concern over the introduction of unilateral tariffs by the US, following a video conference meeting of economic ministers.
In Southeast Asia, the tariff rates range from 10% to 49%, with Cambodia facing a 49% tax and Singapore 10%.
Mr Somjai said Asean should use this opportunity to tighten cooperation, not to challenge the US, but to be prepared to deal with global changes triggered by the US new tariff policy.
To Thai exporters, Mr Somjai said there is no need to panic just yet because the economy is growing albeit at a slower pace, with growth possibly dropping from 3% to 1% this year.
"Even if growth turns negative, it isn't still a full-blown crisis. The worst-case scenario would be a showdown between the US and the EU. At this stage, a full-scale global trade war remains unlikely," he said.
No matter how the US trade policy unfolds, Mr Somjai said Thailand must be prepared to respond to an economic slowdown.
He also noted that countries closely aligned with the US are likely to pursue alternative strategies, such as expanding free trade agreements to reduce their reliance on the American market.
Thailand's trade surplus with the US was estimated at over $40 billion last year.
Previously, Finance Minister Pichai Chunhavajira said retaliatory measures are not the correct approach, as Thailand is a small country and mishandling this issue could reduce Thailand's GDP by at least 1 percentage point.
Somjai: 'Don't challenge the US'
In crisis lies opportunity
Nonarit Bisonyabut, a senior research fellow at the Thailand Development Research Institute, said the situation was an opportunity to drive development.
He said the US' concerns about tariffs are not entirely baseless. He said Thailand should review the rationale behind the differentiated tariff rates it has applied and whether they have served their purposes.
"Some were meant to protect key industries for national development. But we need to ask whether they are just benefitting large capital groups," he said.
Mr Nonarit also urged a review of "zero-dollar exports" and consider if these privileges should be revoked. Zero-dollar exports refer to trade activities that result in little or no economic benefit for the exporting country.
He said the government must think beyond the US' current moves as the reciprocal tariff is only the first move to address trade imbalances.
The US is also seeking to push companies to move production back to the US and solve the country's debt problems.
"There are more moves to come. We've only seen an appetiser," he said.
Mr Nonarit said the Trump administration is in for a long game and wants to reshape the global trade order.
The US is unlikely to stop its aggressive policy any time soon, and the sooner a country gives in, the more dangerous the situation becomes. The US tariff policy could backfire at home as high inflation would also hit American consumers hard.
In this case, public pressure is expected to grow for reversal of the policy.
The US president also faces a legal challenge in the Supreme Court about his authority to impose such tariffs, he said, noting there is a possibility of policy reversal within six months to two years, without outside pressure.
Rushing to negotiate and make offers could cost Thailand more than it gains, he said, noting that Singapore's approach is also considered a strategy in which the people are asked to brace for impacts.
"Some offers we make would be hard to take back. Sometimes, we have to wait and see... Thailand is a small country or doesn't have much leverage to secure substantial gains from the negotiations," he said.
Nonarit: 'More moves to come'
