Association chief says 19% US tariff is manageable, but warns of global oversupply and Japan’s shift towards US rice

Thailand’s rice exporters are downplaying the immediate impact of the new 19% US tariff on imported goods, which came into effect today, August 1, 2025. 

While acknowledging the duty, they are more concerned about global market dynamics, including oversupply of white rice and a potential shift in Japan’s import preferences towards the United States.

US President Donald Trump today signed an executive order implementing the 19% tariff on Thai imports, a reduction from the previously proposed 36%. 

Rice is a significant Thai agricultural export to the US, where Thailand currently holds the largest market share, particularly for premium jasmine rice.

Charoen Laothamatas, president of the Thai Rice Exporters Association, told “Thansettakij” that the 19% rate doesn’t put Thailand at a significant disadvantage against Vietnam, its direct competitor, which faces a 20% tariff. 

He suggested that the new duty would merely slow down the expected loss of jasmine rice market share to Vietnamese varieties like ST21, which are similarly priced.

“However, if Vietnam manages to increase its production tenfold in the future, making rice even cheaper, Thailand will lose more market share,” Charoen stated. “Selling rice at a high price isn’t always good. If the price is high and there’s no competitor, it’s fine, but if the price is high and competitors enter, it opens the door for them to snatch market share. So, don’t be too happy when rice prices are high; it’s better to have a moderate price and sell a large volume.”

Regarding the Japanese market, where Thailand annually exports roughly 300,000 tonnes of 5% white rice, there’s concern that Japan might reallocate this quota to the US. 

The extent of this potential shift will require close monitoring. Jasmine rice exports to Japan are currently minimal, primarily used in restaurants.

Charoen acknowledged that the tariffs set by the US for each country are part of the rules businesses must accept if they wish to sell. He anticipates that the role of free global trade will gradually diminish in the future.

Published Date: August 1, 2025