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ResourcesCorporate and Tax AdvisoryThailand Tax LawMore Thai Purchasing Could "Pave the Way for Lower Reciprocal Tariffs"?

More Thai Purchasing Could "Pave the Way for Lower Reciprocal Tariffs"?

Transcript of the above video: 

As the title of this video suggests, we are discussing, well we are discussing the situation involving sort of this back and forth regarding tariffs between Thailand and the US. I thought of making this video after reading a recent article from the Bangkok Post, that is bangkokpost.com, the article is titled: Thailand may buy more US goods in talks. Quoting directly: "Thailand could potentially import an additional US$32.9 billion worth of American goods to ease the adverse impacts of US President Donald Trump's tariffs by buying more aircraft, energy and grains from the US, says Kuala Lumpur-based Maybank. Assuming Washington's imports from Thailand remain unchanged, Thailand would need to import 32.9 billion more worth of US goods to shave the deficit ratio to 20% and bring reciprocal tariffs down to the 10% baseline, said Chak Reungsinpinya, Managing Director and Head of Research at Maybank Securities (Thailand). "We think the Thai Government could negotiate with the US Government, committing to buying more US energy, grain and aircraft. This would significantly cut the US trade deficit with the country and potentially pave the way for lower reciprocal tariffs, given the way they are calculated,” he said." 

So interesting. All of these things, energy grain and aircraft; I'm from Kansas. And look, the economy in Kansas ain't sexy but it's got teeth. We have got energy, grains, and aircraft - cattle, we have got a lot of cattle, a lot of live-stock too - but we have got energy, grains and aircraft, that's Kansas. So, if Thailand buys up $32.9 billion more of that, I'm betting it's probably going to help Kansas, so thanks Mr. Trump, you are probably helping out where I am from.

That said, Thailand I think you are probably getting a pretty good deal at the end of the day. I mean energy, grains and aircraft; everybody needs that stuff. One thing I would kind of point out, just kind of a casual observation as an observer from out here, how about smaller aircraft. They don't all necessarily have to be these big old Boeing 747s and stuff, there's stuff over in Wichita. We have got Cessna, and we have got Lear Jet; they're over there too. It's not just Boeing or Spirit or whatever they are called; I think they are Boeing again. In any event, and then of course there's always energy and grain. I mean look there is probably going to be grain in Kansas after nuclear winter, there's always grain in Kansas. 

The point I'm trying to make is this could be very beneficial for the United States. I see it being very beneficial for Thailand as well in many ways. In short, as I have discussed in other videos, the best way forward for the US Thai relationship to my mind, is coming to some kind of mutually beneficial arrangement to sort of get down the road, something that the Americans can live with, something the Thais can live with, and I'm confident that Mr. Trump's ultimate goal - it seems to be his ultimate goal in these things - coming to some kind of deal. But that said, this remains to be seen, and we will certainly keep you updated on this channel as the situation evolves.