Thailand’s billion-dollar rice industry would be exposed to major risks if its trade negotiations with the U.S. fail, as the Trump government is threatening a 36 percent tariff on the country.

While the U.S. is not Thailand’s largest rice consumer, it remains a critical market for high-value varieties, especially the premium jasmine rice. The Thai government claimed to be advancing a new proposal to achieve a trade balance with the U.S. and avoid Trump’s additional tariff, but the huge uncertainty has burdened local farmers.

Rice growers in the country are facing a harsh reality, with dwindling margins and the looming threat of unsustainable debt with just one failed harvest.

“Most farmers borrow money. When we harvest the rice, but the price is not good, we still have costs, for the family and for production. Our income is irregular, so it makes life difficult. Farmers cannot escape this problem. They face this same hardship,” said Thawee Sunimit, a local rice farmer.

Half of Thailand’s cultivated land is devoted to rice farming, and one in five households grows rice. The pillar industry has already eroded with rising costs, extreme weather, and shrinking exports, and the tariff threat further undermines the exports and narrows the profit. As countries have been delaying their buying decisions due to the tariff, the overall rice exports of Thailand fell by 30 percent in the first quarter.

“Farmers are the driving force of the country’s economy. We are concerned because we export a lot of rice to the U.S., more than 800,000 tonnes per year. If this tax is set, 36 percent will immediately increase the price of our products. We are not sure if consumers will have purchasing power, or if they will switch to cheaper products,” said Kriengsak Tapananon, the Honorary Adviser of the Thai Rice Farmer Association.

Despite the export decrease, Thailand remains the world’s second-largest rice exporter, supplying more than 9 million tonnes annually to global markets. As Trump’s tariff is shaking Thailand’s rice industry, the global rice supply is also under threat.

Published Date: July 8, 2025