Trump’s policies could inflict THB160-billion loss on Thailand
The Thai Chamber of Commerce (TCC) advised Thailand to maintain its neutral stance in global trade, noting that US President-elect Donald Trump’s trade policies could trigger a 160-billion-baht loss for the Thai economy.
“The US political transition is a good opportunity for Thailand to become a conflict-free country, set up a clear business flow and launch measures to attract investment in Thailand,” said chamber president Sanan Angubolkul.
He expects Trump’s trade policies to affect Thai exports, especially products in which Thailand has a trade surplus with the US like hard-disk drives, semiconductors, tyres, air conditioners and solar cells.
Manufacturing, construction and agriculture sectors would be affected by Trump’s trade policies and barriers, he added.
Sanan noted that Trump’s 60% import tariff on Chinese goods would trigger an influx of Chinese products in the Thai market. Though Thai consumers would be able to access Chinese products at a cheap price, this would severely affect Thai manufacturing and service sectors, he pointed out.
However, he said Trump’s import tariffs on Chinese goods could trigger production base relocation from China to reduce export costs, offering an opportunity for Thailand to attract foreign investment.
Sanan expects Trump’s trade policies to trigger a loss of 160 billion baht on the Thai economy, especially import tariff hike. Initially, Thai exports would drop by 1.03%, triggering a 0.59 percentage point decline in Thai gross domestic product (GDP), he said.
TCC also advised Thailand to expand trade and investment to India, and form a trade partnership with Vietnam in order to boost the economic growth.
Thailand should adapt itself over time, prepare proactive and passive policies, and strengthen public-private collaboration to cope with this issue, especially on imports and exports, he added.
Trade war could intensify
Meanwhile, the Federation of Thai Industries (FTI) told Krungthep Turakij that Thailand should monitor the trade war triggered by Trump’s presidency closely, especially import tariff hike.
FTI president Kriengkrai Thiennukul warned that Thailand would be targeted by the US for having a trade surplus, adding that it could also lead to appreciation of the baht.
Thailand recently gained a trade surplus with the US because Trump targeted China during his previous presidency in 2017-2021, he explained.
Kriengkrai expects volatility in investments due to Trump’s policy to draw investments to the US, especially reduction of corporate tax from 21% to 15%.
Trump does not have interest in multilateral negotiations, such as the Indo-Pacific Economic Framework launched by incumbent President Joe Biden, of which Thailand is among 14 member countries, he said.
He added that Thailand would be at risk of facing US trade barriers for partnership with BRICS, an international bloc which comprises China among 10 member countries.
Kriengkrai emphasised that Trump had announced the US would cease participation under the Paris Agreement aiming to tackle climate change.
He also expressed concerns over the influx of Chinese goods triggered by Trump’s 60% import tariff, saying that it would cause small- and medium-sized enterprises to close their businesses and lay off their employees.
“Thailand should maintain domestic industry along with attracting foreign investments,” he added.
