What's Happening?
Siam Legal International has reported on the status of the US Treaty of Amity with Thailand and a new trade framework established in 2025. The Treaty of Amity, active since 1966, allows American investors
to own majority shares in Thai companies in non-restricted sectors. The new trade framework aims to lower trade barriers and expand market access, with Thailand eliminating tariffs on 99% of U.S. industrial, agricultural, and food products. The U.S. will maintain a 19% tariff on most Thai products but will allow zero-tariff access for selected goods. This framework builds on previous agreements to enhance bilateral trade relations.
Why It's Important?
The continuation and expansion of the Treaty of Amity and the new trade framework present significant opportunities for U.S. businesses in Thailand, particularly in sectors like technology, food production, and medical devices. This development is expected to increase U.S. exports to Thailand and reduce compliance costs for American companies. The agreement strengthens economic ties between the two nations, potentially boosting the U.S. economy by opening new markets and enhancing competitiveness for American firms. It also reflects a strategic partnership that could influence regional trade dynamics in Southeast Asia.
What's Next?
U.S. companies are likely to explore new business opportunities in Thailand, leveraging the favorable conditions created by the treaty and trade framework. Businesses will need to assess their shareholding structures and compliance requirements to fully benefit from these changes. Potential updates to Thailand's Foreign Business Act could further open sectors to U.S. investment, although current restrictions remain in place. The ongoing collaboration between the two countries may lead to further trade agreements and economic initiatives, enhancing bilateral relations and economic growth.
