• The US is reverting to Section 301 as its primary trade policy instrument following the expiry of Section 122 on 24 July 2026. Unlike previous investigations, the latest Section 301 review has expanded beyond China to cover multiple trading partners, including Thailand, and introduces two new areas of scrutiny: the absence of import restrictions on goods produced with forced labor; and structural excess capacity.
• The forced labor issue is likely to have only a limited impact on Thailand’s relative competitiveness, as Thailand faces the same proposed tariff rate of 12.5 percent as many of its major Asian competitors. Moreover, Thailand could still negotiate a lower rate by strengthening its domestic measures to align with US requirements. In contrast, structural excess capacity represents a more significant risk, as it could trigger future industry-specific trade restrictions.
• KResearch views that the Section 301 process still provides trading partners opportunities to negotiate and implement policy adjustments before final measures are imposed. Consequently, the outcome of the investigation will depend not only on the US’ findings but also on the consultation process and policy responses of the countries concerned. Thai businesses should therefore prepare for a new trade environment in which labor standards, industrial policies, and supply chain transparency will become increasingly important determinants of market access alongside tariffs.
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