Federation of Thai Industries concerned at Trump’s reshoring policy
US president-elect’s ‘America First’ vow could see US companies intending to relocate to Thailand make an about turn
The Federation of Thai Industries (FTI) has warned that the United States under Donald Trump’s presidency might implement a reshoring policy, inviting American companies overseas back to the country to create jobs and drive its economy under Trump’s “Make America Great Again” policy.
The reshoring policy could result in American companies in key industries such as digital technology, cloud and data centres that have been planning to relocate to Thailand cancelling their move and remaining in the US, FTI chairman Kriengkrai Thiennukul said on Wednesday.
Although these companies have already applied for investment promotional privileges with Thai authorities, they have yet to start establishing a facility in the kingdom, and can therefore be persuaded back to the US if Trump’s government offers better privileges, he said.
“Trump’s ideas are completely opposite to Biden's, especially regarding environmental policies and clean energy,” said Kriengkrai. “We might see the US turn its back on the 2015 Paris Agreement, an international treaty on climate change, and return to supporting cheap fossil fuel sources to gain an advantage for domestic industries.”
He pointed out that returning to cheaper fossil fuels and the cutting of corporate tax from 21% to 15% are among the moves that the Trump administration can implement to attract American companies to relocate back home.
Kriengkrai said the move by Chinese companies to relocate to Thailand and use the country as an export base to circumvent the tariff barrier from the US and Europe may put Thailand under US’ scrutiny. Thai exports to the US could end up being lumped together with Chinese exports and therefore heavily taxed, he said.
“Trump announced during his election campaign that he would raise the import tariff from countries that have a trade surplus over the US by 10-20%, and the tariff for Chinese products by 60-100%,” said the FTI chief.
Kriengkrai added that Thailand needs to closely monitor international relations and trade negotiations of the US, which may shift from multilateral to bilateral discussions, negotiating with trading partners on a country-by-country basis.
Previously, the US conducted foreign policy under the Indo-Pacific Economic Framework (IPEF) to counter China's influence in the region. This, too, could change under the Trump administration, he said.
“We need to watch and see how much the actual implementation will align with the campaign promises. All parties will need to prepare a backup plan for potential changes, and we hope that the government, relevant agencies, and the private sector can collaborate to be ready and adapt in time,” said Kriengkrai.
