Tariff-ied: Thai exporters brace for US trade heat
Thai exporters could soon find themselves in hot water, facing increased tariffs from the United States. The Government of Thailand might also be compelled to import more American goods to balance out its trade surplus, warns Burin Adulwattana, the Managing Director and Chief Economist at Kasikorn Research Centre (K-Research).
Burin shared that K-Research hasn’t yet drilled down into the possible fallout of US import tariffs on Thai goods. The impact would largely hinge on whether these tariffs are blanket measures or specifically targeted at Thailand.
Thai products at risk of being caught up in these trade skirmishes include Bluetooth modules, broadband equipment, solar panels, power adapters, machinery, auto parts, mobile camera modules, and air conditioners. Despite the barriers, Thai-made auto parts like tyres might still retain their competitive edge cost-wise.
Burin sounded the alarm that Thailand might have to boost its imports from America to ease its trade surplus, given that it ranks as the 10th-largest surplus holder with the US. Likely imports could include oil, chemicals, natural gas, small aircraft, soybeans, and wheat.
Some Thai exports may dodge the trade barriers, particularly those tied to US companies but manufactured in Thailand.
As Chinese firms shift their production to Thailand and elsewhere to dodge US tariffs, Burin noted that Thai solar panels have already taken a hit due to US anti-dumping measures, leading to a staggering 34% year-on-year slump in exports to the US in 2024.
If Chinese manufacturers shift to new frontiers like Laos or Indonesia, the US is tipped to keep trade restrictions in play.
Burin pointed out that under US President Donald Trump’s “America First” mantra, there’s a push for bilateral trade deals balanced with progressive tariffs, all aimed at luring manufacturing jobs back to American soil, especially in the automotive and tech sectors.
Key industries central to the US’s economic and political clout include steel, aluminium, defence, artificial intelligence, semiconductors, aerospace, and pharmaceuticals, K-Research indicates. Burin urged Thailand to mull over further opening its doors to US businesses or ramping up imports to trim the trade surplus.
In the event of a US-China trade war escalation, Burin reckons that the Federal Reserve might find its hands tied in slashing interest rates, although two cuts are pencilled in for this year.
He also cautioned that Thailand has less than two months to haggle with the US over trade restrictions, with the endgame squarely depending on Thailand’s diplomatic prowess.
Latest Thailand News
