Thailand is weighing allowing zero-duty market access for more U.S. goods to help persuade the Trump administration to lower a threatened 36% tariff on its exports.

Thailand, which has previously cut tariffs on imports of longan and tilapia fish from other countries, could lower the levy for the U.S. on those goods to zero, Finance Minister Pichai Chunahavajira said. The government may also amend existing regulations to allow left-hand drive vehicles from the U.S., and eliminate taxes on goods already included in free-trade agreements with other countries, he said.

The US is pushing for “ambitious proposals,” the minister told a trade seminar in Bangkok on July 14, without elaborating. The two sides remain engaged in ongoing dialogue to reach a deal, he said. 

Thai officials are optimistic about finalizing an agreement before the August 1 deadline set by President Donald Trump. Thailand has pledged to eliminate import duties on 90% of U.S. goods and to remove various non-tariff barriers. The government has also offered to increase purchases of U.S. agricultural and energy products in a bid to reduce its trade surplus, which stood at $46 billion last year.

The U.S. was Thailand’s largest export destination in 2024, accounting for approximately 18% of total shipments. Thai exports have increased by about 15% in the first five months of this year, driven by accelerated orders ahead of the anticipated tariff implementation.

Some of the U.S. demands in trade talks go beyond tariff and non-tariff reductions and cover geopolitical issues, Pichai told the Bangkok trade seminar. Conceding to such demands may spark domestic unrest, he said, adding that any agreement with the U.S. must be mutually beneficial and sustainable for Thailand in the long term.

U.S. demands regarding local content requirements are unlikely to have a major impact as Thailand’s exports are mostly from older industries with high domestic inputs, Pichai said.

The U.S. has threatened higher tariffs on countries suspected of rerouting Chinese goods to avoid the trade war. Trump recently announced a deal with Vietnam that includes a 20% tariff on exports and a 40% rate on products considered to be transshipped.

Thailand is among several countries that have received tariff warning letters from the Trump administration and is now racing to finalize a deal to avoid steep levies. Failure to secure reduced tariffs from its largest export market could lead to a sharp decline in shipments and shave up to one percentage point off the nation’s projected economic growth.