BOI unveils 5 major measures to tackle Trump tariffs and trade war

BOI unveils urgent 5-measure package to boost investment and help Thai businesses adapt to Trump tariffs and the global trade war.

Narit Therdsteerasukdi, Secretary-General of the Board of Investment (BOI), announced that the BOI has introduced a comprehensive set of measures under the title "Enhancing the Competitiveness of Thai Entrepreneurs to Adapt to the New Global Era" to mitigate the impact of US tariffs and the global trade war.

Since the US began imposing reciprocal tariffs, concerns among investors have risen, particularly as competition within the domestic market has become more intense. Over the past two months, the BOI has held discussions with industry groups and investment-supported entrepreneurs to understand their challenges and find solutions to alleviate the impacts. 

Now, the BOI board has introduced these key measures, addressing two major concerns:

Supporting Thai businesses to enhance their competitiveness and strengthen domestic supply chains to better prepare for future changes.

Reducing risks from US trade measures and organising investments in specific sectors to protect domestic industries while maintaining a balanced business environment. 

The measures include five key sub-measures:

Measure 1

This measure aims to promote Thai SMEs by enhancing their efficiency to improve competitiveness. Special benefits are provided to SMEs registered with the Office of Small and Medium Enterprises Promotion (OSMEP), allowing them to invest in upgrading their operations. This includes modernising machinery, adopting automation and digital technologies, improving energy efficiency, upgrading to international standards, and transitioning to new industries.

SMEs will now receive additional benefits, with a corporate income tax exemption extended from 3 years to 5 years. The exemption will cover 100% of the investment in improving operational efficiency, up from the previous 50% limit.

Measure 2

This measure promotes the use of local components in the production of electric vehicles and electrical appliances to expand opportunities for Thai parts manufacturers and connect them to global supply chains. The measure encourages foreign companies to use locally produced parts by establishing criteria that companies must meet to qualify for benefits.

Companies must obtain "Made in Thailand" (MiT) certification from the Federation of Thai Industries and use a specified percentage of local raw materials and components. These requirements include:

For BEV (Battery Electric Vehicle) production, at least 40% of the total value of raw materials must be sourced locally.

For PHEV (Plug-in Hybrid Electric Vehicle) production, at least 45%.

For electric vehicle parts, at least 15%.

For electrical appliances, at least 40%.

In return, companies will receive a 50% corporate income tax reduction for an additional two years beyond the normal period.This measure will be complemented by business-matching activities between large enterprises and Thai parts manufacturers, such as SUBCON Thailand and Business Matching events, which generate over 20 billion baht in business deals annually. Additionally, the BOI will organise Sourcing Day events in collaboration with leading companies in the automotive, electronics, and electrical appliance industries.

Measure 3

This measure intensifies the scrutiny of key production processes for certain businesses at risk of circumvention or potential impact from US trade measures, such as the production of automotive parts, electrical appliances, electronics, metal products, textiles, furniture, and bags.

A clear condition is set that businesses must have a significant production process, where the primary raw materials are sufficiently transformed into products. For example, businesses must make at least a 4-digit change in the customs classification code to ensure that Thailand’s export production is widely accepted and beneficial to the country.

Measure 4

This measure involves organising investments in certain sectors to protect domestic industries and maintain a balanced, competitive business environment as follows:

Low-tech industries at risk from US trade measures: The promotion of solar panel production, automotive accessories, and decorative vehicle parts will be discontinued. Additionally, there will be a requirement for majority Thai ownership in businesses producing furniture, bags, and printed products.

Oversupply industries affecting domestic producers: Support for the production of finished steel products, such as long steel, hot-rolled steel sheets, thick steel plates, steel pipes, and metal cutting operations, will be discontinued due to overproduction impacting local manufacturers.

Industries with environmental or community impact risks: Sectors such as metal production, chemicals, plastics, and metalworking processes (rolling, drawing, casting, or forging) will no longer be granted land ownership rights for operations. These businesses will be required to operate within industrial estates, ensuring stricter oversight and regulation.

Measure 5

This measure focuses on improving the employment conditions for foreign personnel to create more local job opportunities and promote knowledge transfer to Thai employees. It stipulates that for manufacturing businesses employing over 100 people, at least 70% of the workforce must be Thai nationals.

Additionally, the minimum income requirements for foreign personnel applying for work visas and permits with the BOI have been set. For example, executives must earn at least 150,000 baht per month, and specialists must earn at least 50,000 baht per month. This is aimed at attracting highly skilled foreign workers who can add value to Thailand’s economy.

Furthermore, the BOI is preparing additional measures to assist businesses directly impacted by the US tariff increases, ensuring that Thailand remains competitive in attracting investment.

The focus will be on target industries where Thailand serves as a production base for exports to the US and has high value-added potential, such as food, rubber products, automotive parts, electronics, electrical appliances, machinery, and jewellery.

Narit emphasised that the ongoing global trade war has intensified competition, with rising tariffs, new trade regulations, competition from imports, foreign investments, and new technologies potentially impacting traditional industries. Thailand must develop a suitable economic and investment strategy to upgrade existing industries, while creating new industrial bases that will drive the long-term growth of the Thai economy. The BOI has therefore introduced several new measures to better organise investments and support Thai entrepreneurs in seizing opportunities for growth in the new global trade environment.

(2025/07/16-00:00)