Thai businesses urged to prepare for results of US election

The remarks are part of a report the office issued on the potential economic implications of the upcoming US presidential election, scheduled for November 5. 

The contest between Democratic Vice-President Kamala Harris and former Republican president Donald Trump is expected to influence the Thai economy significantly, according to  Poonpong Nayanapakorn, director of the TPSO.

If Harris Wins:

• Increased support for free trade, potentially pushing for US re-entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
• Enhanced technology cooperation with Asian partners, benefiting Thailand's Industry 4.0 initiatives
• Increased investment opportunities in clean technology and innovation, particularly in renewable energy and high-efficiency batteries
• Potential softening of measures against China, though supply-chain impacts may persist

If Trump Returns to Office:

• Significant increase in import tariffs, particularly on Chinese goods
• Potential relocation of production bases from China to Thailand
• Decreased US investment in Thailand, especially in manufacturing
• Possible slowdown in technology transfer and restrictions on access to advanced technologies

Both scenarios present distinct challenges for Thailand's economy, particularly concerning trade, investment, and inflation. Harris's policies may lead to more stable commodity prices globally, while Trump's approach could increase inflationary pressures and affect Thailand's export competitiveness.

Recommendations for Thai Businesses

Poonpong has urged Thai entrepreneurs to prepare for the potential opportunities and risks that may arise from the upcoming US presidential election. 

He emphasised the importance of diversifying export markets beyond the United States to reduce reliance on a single market and ensure greater resilience amid uncertainties in international trade relations.

To maintain competitiveness in an evolving global landscape, Poonpong also recommended that Thai businesses focus on developing innovations and adding value to their products. This strategy would not only enhance product appeal but also position Thai enterprises favourably in the face of shifting consumer demands. 

Furthermore, he highlighted the necessity of closely monitoring US trade and economic policies, as these could significantly influence Thailand's trade environment.

In addition, Poonpong advocated for increased investment in clean technologies and alternative energy sources, which align with global sustainability trends. 

He stressed the need to accelerate the development of infrastructure and human resources to support these initiatives, ensuring that Thailand is well equipped to attract foreign investment and establish strong supply chains. Promoting domestic research and development would further bolster Thailand's capacity for innovation and reduce dependence on imported technologies.

To adapt to the changing global economy, Poonpong called for the establishment of flexible investment-promotion policies that can quickly respond to market fluctuations. It is also crucial for businesses to prepare measures to cope with potential import price fluctuations and to effectively manage currency risks by promoting foreign-exchange hedging tools. 

By adopting these strategies, Thai entrepreneurs can better navigate the complexities of global trade and position themselves for long-term success.

The TPSO director emphasised that closely monitoring the situation and preparing flexible response measures will be crucial for dealing with the potential impact of the US presidential election on Thailand's economy.