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Thailand Imposes 10% Duty on Low-Cost Imports to Protect SMEs

  //business-finance.news-articles.net/content/202 .. 10-duty-on-low-cost-imports-to-protect-smes.html
  Published in Business and Finance on Friday, November 14th 2025 at 6:51 GMT by reuters.com

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Thailand to Slash Imports of Cheap Goods with a 10 % Duty – A Move to Protect Small and Medium‑Sized Enterprises

On 14 November 2025, Reuters reported that the Thai government announced a new 10 % import duty on “low‑cost goods” that will come into force next year. The policy is part of a broader package of measures aimed at helping small‑ and medium‑sized enterprises (SMEs) that are squeezed by the influx of inexpensive products from China and other countries. Below is a detailed summary of the article and the additional context it contains.

1. What the New Duty Is

The duty is targeted at imported goods that are priced below a certain threshold – the so‑called “low‑cost” category. Under the new rules, any product whose retail price in Thailand is below 3,000 baht (roughly US$90) will face an extra 10 % duty. The measure is not limited to one industry; it covers a broad spectrum of goods, from clothing and accessories to kitchenware, toys and small household appliances.

The article notes that the duty is not applied to all imports, only to those that meet the low‑cost definition. For example, imported computers and high‑end electronics – even if they are manufactured in China – are exempt because their price per unit exceeds the threshold.

2. Rationale Behind the Move

The primary justification for the duty is to level the playing field for Thai SMEs. A Reuters interview with a senior official from the Ministry of Commerce highlighted that many local manufacturers are losing business to cheaper imports that undercut local prices. By raising the cost of these cheap goods, the Thai government hopes to reduce the market advantage of large foreign producers and give domestic firms a better chance to compete.

The policy is also part of Thailand’s 2025‑2026 National Economic and Social Development Plan (NESDP), which places a strong emphasis on supporting SMEs. The plan identifies small businesses as a key engine for job creation and economic resilience. According to the article, the 10 % duty is intended to be a “quick win” that can have an immediate, tangible impact on the livelihoods of thousands of Thai entrepreneurs.

3. Expected Impact on SMEs

The new duty is expected to increase the price of imported low‑cost goods, making local alternatives relatively more attractive. The Thai government’s estimate is that the policy could boost the sales of domestically produced small items by up to 15 % over the first year of implementation. The article quotes an SME association that predicts a 5 % rise in market share for Thai manufacturers of kitchenware and apparel.

Additionally, the policy comes in conjunction with a package of financial incentives for SMEs, including:

• Tax rebates for small manufacturers who increase local production by 20 % or more.
• Low‑interest loans for SMEs investing in new machinery.
• Export subsidies to help local producers reach overseas markets.

Together, these measures aim to create a supportive ecosystem that encourages domestic production, reduces dependency on imports, and enhances the resilience of the Thai economy.

4. Trade‑Legal Considerations

The Reuters article also highlights that the policy has been designed with the World Trade Organization (WTO) rules in mind. Thailand’s trade law allows for “safeguard measures” that protect domestic industries from “surging imports” that threaten national economic interests. The new duty is framed as a safeguard measure rather than a tariff hike, and the government has consulted with the WTO Legal Department to ensure compliance.

Nonetheless, the article notes that some trading partners, notably China, have expressed concerns that the duty could be viewed as protectionist. There is a risk that China or other affected countries could lodge a complaint at the WTO, potentially leading to a dispute that could last several years. The Thai Ministry of Commerce is currently preparing a robust legal defense and has pledged to keep the duty transparent and limited to the specified low‑cost threshold.

5. Implementation Timeline and Monitoring

The duty is scheduled to take effect on 1 January 2026. During the first six months, the Thai Customs Department will pilot the new system to assess its impact on import volumes and compliance. An independent review will be conducted in late 2026, and the policy could be revised based on the findings.

The article cites a statement from the customs chief that the new duty will be administered electronically through the existing “Smart Customs” platform. Importers will need to file electronic customs declarations and declare the retail price of each item. The platform will automatically apply the 10 % duty to any item falling under the low‑cost definition.

6. Reactions from Industry Stakeholders

• Local Manufacturers: Many small manufacturers welcomed the measure. A representative from the Thai Small Business Federation said, “We are grateful that the government recognizes the challenges we face. This duty will level the playing field and keep local jobs safe.”

• Importers and Retailers: Some importers expressed concern about increased costs. A large retailer, which imports clothing from China, said that the duty would raise its overall supply costs by 3–4 %, potentially pushing the retail price for consumers up.

• International Trade Analysts: According to an analysis by a trade think‑tank, the measure could lead to a modest increase in Thailand’s import duties overall, but it would remain within the limits set by the country's WTO commitments. The think‑tank cautioned that the duty may lead to a rise in consumer prices for low‑cost items, which could have an impact on households with limited purchasing power.

7. Additional Links and Resources

The Reuters piece references several additional sources that provide deeper context:

1. Thai Government Press Release – detailing the official policy announcement and the legal basis for the duty.
2. World Trade Organization (WTO) Trade Profiles – explaining Thailand’s obligations under WTO agreements.
3. SME Support Package Overview – a government publication outlining the full suite of incentives for small businesses.
4. Trade Analysis from the International Trade Centre (ITC) – evaluating potential impacts on Thailand’s export and import patterns.

The article also links to an in‑depth interview with a senior official from the Ministry of Commerce, who elaborated on how the low‑cost threshold was determined and how the measure fits into Thailand’s broader economic strategy.

8. Bottom Line

Thailand’s decision to impose a 10 % duty on low‑cost imports represents a strategic effort to safeguard its domestic SME sector in the face of fierce competition from inexpensive foreign goods. The policy is carefully crafted to comply with international trade rules, and it is accompanied by a suite of financial incentives to support local producers. While the move could raise consumer prices for certain categories of goods, the government argues that the long‑term benefits – job preservation, economic resilience, and a healthier domestic market – outweigh the short‑term cost increases.

By balancing protection for domestic businesses with adherence to WTO regulations, Thailand is signaling a pragmatic approach to trade policy that aims to keep its SMEs competitive while maintaining good relations with its trading partners. Whether the measure will ultimately succeed in shifting the balance in favour of local manufacturers remains to be seen, but the government’s comprehensive plan indicates a firm commitment to strengthening Thailand’s economic foundation.