Thai exporters might soon be caught in swirling trade waters, facing the looming shadow of increased tariffs from the United States. Burin Adulwattana, the Managing Director and Chief Economist at Kasikorn Research Centre (K-Research), sounded the alarm, suggesting that Thailand might be forced to import more American goods to ease its trade surplus. Though K-Research hasn’t yet unraveled the full implications of potential US tariffs on Thai exports, the impact could vary depending on whether the tariffs are broadly applied or specifically aimed at Thailand.
Thai exports that might find themselves in the crosshairs include Bluetooth modules, broadband equipment, solar panels, power adapters, machinery, auto parts, mobile camera modules, and air conditioners. Yet, despite such challenges, some Thai-made auto parts, like tires, might still retain their cost competitiveness. In response, Burin cautioned that Thailand might have to ramp up its imports from America, with oil, chemicals, natural gas, small aircraft, soybeans, and wheat being likely candidates.
Interestingly, some Thai exports might slip through unscathed, particularly those linked to US companies yet manufactured in Thailand. The situation gets trickier as Chinese firms redirect their production to Thailand and other countries to evade US tariffs. This scenario has already seen Thai solar panels endure significant setbacks due to US anti-dumping measures, resulting in a staggering 34% year-on-year decline in exports to the US by 2024.
The backdrop of this trade drama reveals Chinese manufacturers potentially shifting their focus to new havens like Laos or Indonesia, which might lead the US to maintain its trade barricades. Under the banner of US President Donald Trump’s “America First” agenda, there exists a push towards bilateral trade agreements balanced by progressive tariffs, all aiming to draw manufacturing jobs back to American soil, especially within the automotive and technological sectors.
K-Research suggests key industries, such as steel, aluminum, defense, artificial intelligence, semiconductors, aerospace, and pharmaceuticals, are instrumental to the US’s economic and political muscle. Echoing these sentiments, Burin urged Thailand to consider extending further courtesies to US businesses or boosting imports to whittle down the trade surplus. Should a US-China trade conflict intensify, Burin speculates that the Federal Reserve might be hamstrung from slashing interest rates, although two reductions are expected this year.
As the clock ticks, Thailand has less than two months to diplomatically negotiate with the US over trade restrictions, highlighting the crucial role of Thailand’s diplomatic skills in determining the outcome. Amidst the shifting sands of global trade, it will be intriguing to see how Thailand navigates this complex web of fiscal challenges, making for an engaging chapter in the ever-unfolding saga of international commerce.
I hope US tariffs don’t escalate. They could seriously destabilize global trade.
I agree, but isn’t the point of this to bring back manufacturing jobs to America?
True, but the damage to international relations might outweigh the benefits.
Plus, who says these jobs will pay well or last long with automation rising?
Tariffs have always been a double-edged sword. History shows they often harm the consumer.
Thailand should not give in to US pressure. It needs to stand strong just like other Southeast Asian countries.
Easier said than done with such economic interdependence in today’s world.
That doesn’t mean they shouldn’t fight for a fair deal.
Maybe aligning more with the EU could be a way forward for Thailand.
What happens if Thai manufacturers just move to other SEA nations like Indonesia?
US tariffs would likely follow them as it happens. The goal is to restrict imports regardless of their origin.
The trade war between the US and China is a ticking time bomb for global markets. Thai exporters are just the collateral damage.
Collateral damage but also potential beneficiaries if they play their cards right.
US policies are increasingly isolationist. Such protectionism will hurt more in the long run.
It’s about time someone puts America first! Why should we bow down to globalism?
Being part of the global economy isn’t bowing down, it’s about partnership and growth!
I think Burin Adulwattana raises valid points. These tariffs could backfire, especially if negotiations fail.
Exactly, and what if countries like Vietnam suddenly outshine Thailand in exports?
They do need a solid strategy for engaging with the US rather than reacting impulsively.
Seems like another chapter in the globalization saga. But what about the environmental costs of all this shipping back and forth?
Right, all this talk of economics, and no one mentions carbon footprints. Tariffs shift trade routes, which impacts global emissions.
If the Federal Reserve truly can’t cut rates, isn’t the US economy even more at risk here?
A stalled economy is bound to happen occasionally. How they navigate this will define the next economic chapter.
Why don’t we just focus on reducing our dependence on foreign goods altogether?
That’s idealistic. The world economy has evolved beyond autarky. Interdependence is key now.
Regardless of politics, the average Thai worker could suffer. Let’s not forget them in this conversation.
It’s not just Thailand. The pattern of trade redirection is a global issue, not just a Thai one.
I fully support the tariffs. Why rely on other countries when the US can build locally?
I’m wondering if US companies manufacturing in Thailand will start pulling out or relocating soon.
Even if this standoff breaks Thai exports, shouldn’t other ASEAN countries pitch in to support each other?