Latest News

The CEO of one of Thailand’s leading manufacturers says his customers are rushing to stock up during Trump’s tariff pause

  • April 14, 2025

Thailand, along with the rest of Southeast Asia, got some temporary relief when the U.S. President Donald Trump chose to delay his “ Liberation Day ” tariffs by 90 days. Now, the country’s U.S.-bound exports only have a 10% tariff, as opposed to the 36% threatened by Trump.

Asian markets have gone on a wild ride since Trump first unveiled his reciprocal tariffs on April 2, falling and rising according to the president’s statements. Thailand’s benchmark SET index fell by 9% between April 2 and April 9, only to rally after Trump announced his tariff pause. Still, the index has yet to recover from the “Liberation Day” hit.

“Reciprocal tariffs, we thought, were excessively high,” said Victor Cheng, the CEO of Delta Electronics Thailand, last week before Trump announced his tariff pause.

U.S. actions were causing “anxiety and great concern,” Cheng said, but noted that customers had yet to change or cancel any orders due to the tariffs and were instead adopting a wait-and-see attitude. Cheng added later, after Trump paused his tariffs, that customers are using the 90-day pause on reciprocal tariffs to “stock up”.

The CEO also explained why his U.S. customers, and not his company, “will have to bear the extra tariff on top of the original selling price.” He points out that most of Delta Electronics Thailand’s products are classed as “free on board”, which means responsibility passes from the seller—his company—to the buyer—the U.S. customer.

Who pays for tariffs is a major political point in the debate around Trump’s trade policy, with the president and his supporters claiming that the foreign government or company pays for the tariffs . Most trade professionals note that, in fact, it’s the importer that pays: it may then pass some, if not all, of the extra cost to end-consumers. (Large importers, like Walmart, might also be able to force foreign suppliers to take a haircut on price)

Still, Cheng was concerned that steep U.S. tariffs would still indirectly affect his company, by placing additional burdens on his customers and spurring inflationary pressures.

“Tariffs will definitely have some impact. A mild level will be OK…but high tariffs beyond 15% will be difficult to take by any single party and will cause disruption,” Cheng said in a follow-up conversation after Trump’s tariff pause.

Cheng noted that, in the days since “Liberation Day,” Thailand’s government had reached out to industry associations and individual companies to understand how tariffs would affect their business. He predicted that Thailand will lower tariffs on U.S. goods and purchase more U.S. commodities, while coordinating with its fellow Southeast Asian governments to negotiate with the U.S. as a bloc.

OK