Thai private sector predicts fallout from US election

US voters go to the polls on Tuesday (Wednesday, Thai time), with candidates Donald Trump (Republican) and Kamala Harris (Democrat) tied neck and neck in pre-election public surveys. 

Thai Chamber of Commerce chairman Sanan Angubolkul said he did not expect the US election outcome to trigger major impacts on the Thai economy this year or early next year. 

He noted that Thailand was among many countries already facing US import tariffs, but said China was the most severely impacted. However, he expects the US House of Representatives and Senate would oppose Trump's protectionist vow to increase tariffs by 10% to 60%.

Thailand's trade surplus with the US is being watched in Washington, he said. Meanwhile, Trump’s promise to impose a 60% import tariff on Chinese manufacturers would see an influx of Chinese goods to other countries if he wins the election, Sanan said.

A Harris win would have similar effects, he added.

“Despite the difference between the two candidates’ policies, their measures against China are similar, especially trade barriers.”

He said the US would be strict on Chinese goods manufactured in Thailand, such as electric vehicles, solar cells, electronic devices and car tyres.

Sanan urged the Thai government and business sector to adapt their strategies to changes in global trade that the new US administration will bring. Thailand should boost the value of its products and carefully monitor unfair trade competition, he said.

Whatever the election’s outcome, he said Thailand could be confident in maintaining its 191-year trade and diplomatic relationship with the US. 

Maintaining ties with US and China

Chaichan Charoensuk, chairman of the Thai National Shippers' Council, said Thailand had benefited from US trade policies over the past 10 years, noting that Thai exports to the US had grown 112% during that time.

He urged Thailand to implement foreign policies to maintain a balanced relationship with the US and China.

Meanwhile, Trade Policy and Strategy Office director Poonpong Naiyanapakorn said if Harris wins the election, the US would maintain its foreign affairs and trade policies, especially free trade support.

If Trump wins, his protectionist American First policy would lead to an import tariff hike, resulting in an impact on Thai exports, he warned.

Echoing Poonpong, the Bank of Thailand’s spokesperson Chayawadee Chai-anant said the global economy would not change much if Harris wins the election.

She pointed out that Trump’s protectionist policies would likely trigger an impact on Thai exports, global trade and currency markets. An intense trade war could lead to an influx of products to Thailand or ASEAN while also triggering volatility in the currency market, she said.

Risks for Thai economy

Amonthep Chawla, executive vice president of CIMB Thai Bank, said the US-China trade and technology war would continue even if Harris wins the election. 

This could result in opportunities for production base relocation to Thailand, he said, adding that the Thai economy could expand by 3% next year.

However, he said that if Trump wins, Thailand would face bigger economic risks, including a strengthening dollar and intense trade competition. In this case, he expected lower than 3% expansion for the Thai economy due to import tariffs and a drop in production efficiency.

Krungthai Bank market strategist Poon Panichpibool said cutting Thai interest rates would be difficult if Trump wins the election, as his tariff hike would trigger inflation. The dollar would strengthen for a month after a Trump election win, he predicted.

On the other hand, he expects short term dollar weakening if Harris wins the election.

Jitipol Puksamatanan, senior director of SCB Asset Management, said a Harris victory would have only a slight impact on the Thai economy. A Trump win would however spark risks for the Thai and global economy due to higher trade barriers, he said.