Thailand seeks to strengthen US trade ties by cutting tariffs. Is it aiming to grow as a key aluminium scrap hub amid China’s retreat?

While many countries are retaliating against the United States with counter-tariffs, Thailand is taking a different approach - considering reducing existing taxes on American goods. But why? The goal is to boost imports from the US and, in return, secure a favourable trade deal from the Trump administration.

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Thailand is among the countries hit with a steep tariff rate of 36 percent—significantly higher than expected. Despite this, Deputy Prime Minister Pichai Chunhavajira stated the Thai government was in no rush to initiate talks with the US. Rather, they chose to wait until their proposals were prepared. Mr Pichai will now take the proposals forward for negotiations.

The Thai government aims to establish a balanced trade relation with the United States. Currently, the country imports far more from the US than it exports. According to the USGS data, Thailand exported 35,200 tonnes of aluminium to the US and imported 365,000 tonnes. Both export and import volumes rose 5.4 per cent and 59 per cent Y-o-Y from 33,400 tonnes and 229,000 tonnes.

Thailand mainly exports aluminium plates, sheets and bars to the US. In 2024, it exported 33,100 tonnes, accounting for 94 per cent of the total export volume. On the other hand, the country imports aluminium scrap from the US, which totalled 353,000 tonnes in 2024, up by 58 per cent from 224,000 tonnes in 2023. Thailand was the third-largest importer of aluminium scrap from the US in 2024, after India and Malaysia. For a brief period, it even overtook Malaysia to become the second-largest importer.

The above data clarifies to a great extent that why Thailand is considering lowering tariffs on the US while other nations are raising theirs. As a major consumer of aluminium scrap in Southeast Asia, Thailand relies heavily on US imports. Together with Malaysia, the countries import more than 700,000 tonnes of aluminium scrap annually from the US.  In light of ongoing US-China trade tensions, these destinations are well-positioned to become a key scrap processing and recycling hub, replacing China. They will import, refine, and re-export aluminium scrap to China, as the latter imposes heavy duties on American imports. China till 2024 imported 246,000 tonnes of aluminium scrap from the US.