Worries over increasing Chinese imports under Trump presidency
Plagued by increased tariffs under Trump, China likely to use Thailand as an export outlet to the US, business leader warns
A leading infrastructure and investment company predicted a more aggressive influx of Chinese products to Thai markets after Republican candidate Donald Trump was elected as United States’ 47th president on Wednesday.
Trump’s presidency would likely strengthen the US dollar and subsequently increase the policy rate as well as inflation in the United States, Vichai Bencharongkul, president of Benchachinda Holding, said on Thursday.
Vichai believes that Trump, who has promised to impose a blanket tariff increase as well as a 100% tax increase on any country that stops tying its currency to the US dollar basket, will further intensify the US-China trade war.
To circumvent trade barriers, Chinese companies are likely to shift their investment to Thailand, establishing manufacturing bases in the kingdom to export products to the US and other European markets, he said.
“This will open a floodgate for Chinese products to enter Thai markets and compete with locally produced items, including staple goods such as instant and frozen foods, fruits, and vegetables,” he said.
With trade wars with the West heightened, China is also likely to reduce its imports from Thailand, and persuade its people to travel domestically to minimise the outflow of funds. This move could affect the Thai economy which relies on exports to China and the spending of Chinese tourists visiting the kingdom, Vichai warned.
He also predicted that more Chinese electric vehicles would flood Asian markets in the near future as these vehicles could not penetrate the US and Europe due to trade barriers.
“Thailand must employ suitable policies against these Chinese products,” Vichai said. “Most importantly, we must establish clear criteria to differentiate three types of exports: Products that are 100% made in Thailand by Thai companies; those that are assembled in Thailand by foreign companies using local labour and a small number of locally made parts; and those that are shipped to Thailand to be exported later, in a bid to circumvent trade barriers.”
Benchachinda Group (BCG) has engaged in various businesses in Thailand over the past 60 years, including digital infrastructure and solutions, product distribution, content and investment.
