What's Happening?
Siam Legal International has reported on the status of the US Treaty of Amity with Thailand in 2025, highlighting its continued effectiveness and the introduction of a new trade framework. The 1966 Treaty of Amity allows American investors to own majority
shares in eligible Thai companies, providing national treatment in non-restricted sectors. In October 2025, a new Reciprocal Trade Agreement was announced, aiming to lower trade barriers and expand market access. Thailand has agreed to eliminate tariffs on 99% of US-origin products, while the US will maintain a 19% tariff on most Thai products, with zero-tariff access for selected goods. The framework also includes regulatory alignment in sectors like vehicles and pharmaceuticals, enhancing trade relations.
Why It's Important?
The continuation of the Treaty of Amity and the new trade framework are crucial for strengthening economic ties between the US and Thailand. These agreements provide American businesses with favorable conditions for investment and trade, potentially increasing US exports to Thailand. The reduction of tariffs and non-tariff barriers can lead to lower costs and increased competitiveness for US companies operating in Thailand. This development is particularly beneficial for sectors such as technology, food production, and medical devices, which are expected to see growth in trade volume and investment opportunities.
What's Next?
As the new trade framework takes effect, US companies are likely to explore expanded opportunities in Thailand, particularly in sectors aligned with the framework's benefits. Businesses will need to assess their shareholding structures and compliance requirements to fully leverage these opportunities. Potential updates to Thailand's Foreign Business Act could further open certain sectors, although the core Amity eligibility rules remain unchanged. The ongoing collaboration between the two countries is expected to enhance bilateral trade, with annual trade already exceeding $50 billion.
