The Bank of Thailand has cautioned that the country will face prolonged and uncertain economic fallout from ongoing U.S. tariff policies, particularly as a key trade exemption nears expiration.

Speaking at a press briefing on Friday, Governor Sethaput Suthiwartnarueput said the full effects of Washington’s tariffs would likely become more evident in the second half of the year. Thailand is currently confronting the prospect of a 36% tariff on exports to the U.S. if no new agreement is reached before a global trade moratorium ends in July.

The United States is Thailand’s largest export destination, accounting for 18.3% of the country’s outbound trade in 2024—worth nearly $55 billion. The U.S. trade deficit with Thailand stood at $45.6 billion last year, drawing attention from American trade officials under President Donald Trump’s revived protectionist agenda.

Governor Suthiwartnarueput warned that Thailand’s manufacturing sector would bear the brunt of the tariff hike, although he noted the economic disruption is unlikely to match the scale of the COVID-19 pandemic. He also raised the alarm over possible trade diversions, which could lead to a surge in low-cost imports flooding the Thai market.

Negotiations with the U.S. are ongoing as Thai officials seek to mitigate the looming tariff burden and safeguard critical export industries.