Thailand’s economy threatened by Trumponomics 2.0 and China’s slowdown
Thailand’s economic future faces uncertainty as Trump’s economic policy revision, dubbed Trumponomics 2.0, emerges as a significant threat to its growth in 2025. An independent academic highlights this as a primary concern, alongside other challenges including household debt, investment and interest rates, China’s economic slowdown, and geopolitical tensions.
Trumponomics 2.0 is poised to impact Thailand’s GDP adversely by an estimated 0.3% to 0.5%. Aat Pisanwanich, an international economics expert and advisor at Intelligence Research Consultant Co Ltd, projects Thailand’s economy to grow by 2.2% to 2.7% this year, marking a seventh consecutive year with growth below 3%.
“US tariffs under Trumponomics 2.0 are expected to reduce Thai exports to the US by 5% to 10%, resulting in an overall export decline of 2%,” Aat noted. Consequently, Thailand’s trade deficit with the US is predicted to decrease to 27.5 billion baht (US$804 million), while imports from the US are set to double.
Key sectors such as electronics, auto parts, and rubber products are likely to feel the brunt of these tariffs.
The academic also emphasised China’s crucial role in the global and Thai economies. The Chinese economy’s slow growth diminishes the demand for goods and reduces the number of Chinese tourists travelling abroad.
China’s pursuit of a 5% growth target by maintaining production levels leads to an excess of Chinese products entering trading partners’ markets, including Thailand.
Thailand economy
“If China’s growth falls below 5% in 2025, Thailand’s exports to China will be impacted, and Chinese tourist numbers may not exceed 7 million out of the 32 to 34 million foreign tourists expected in Thailand,” Aat warned. This influx of Chinese goods, including steel, electronics, and consumer goods, is expected to push Thailand’s trade deficit with China to a six-year high.
Thailand is set to be the sick man of ASEAN, with a projected GDP growth of 2.4%, ranking ninth among ASEAN members. Vietnam and Cambodia are forecasted to lead the region with 6.2% growth. The country’s exports are anticipated to grow between 1.5% and 2.2%, with total exports valued at approximately US$296 to US$298 billion.
Aat expressed concerns over multidirectional pressures in 2025, potentially leading to an increase in closures among small and medium enterprises, with some possibly being acquired by foreign investors. He also highlighted the untimely implementation of VAT collection given the current economic landscape.
The lack of significant investment projects to drive growth and the ineffective allocation of budget for populist measures further exacerbate the economic challenges. Unemployment is likely to rise due to an economic slowdown, company closures, and downsizing among businesses, reported Bangkok Post.
“The Thai economy remains heavily reliant on external factors such as foreign direct investment, exports, and tourism. This dependence poses risks if any of these factors encounter negative impacts,” Aat concluded.
