Thai Chamber of Commerce frets over tariff impact on Thai exports

The University of the Thai Chamber of Commerce (UTCC) anticipates that President-elect Donald Trump’s foreign trade policies could impact Thailand’s export sector and the broader economy.
Trump won the US presidential election on Nov 5 and has threatened to increase tariffs on imports into the US, causing many governments to consider the implications for their economies.
Trump proposed imposing a 10-20% import tariff on countries holding a trade surplus with the US, while China would face a 60% import tariff.
Major losers in this scenario include Mexico, China and the European Union, all of which have significant trade surpluses with the US.
For Thailand, which has the ninth largest trade surplus with the US among its trading partners, the surplus for the first eight months of 2024 stood at US$22.3 billion as of October 2024.
Increased tariffs may directly impact Thai goods, including electronics, machinery and components, processed foods, metal products, and rubber products.
Moreover, this could affect supply chains linked to China, meaning Thailand may have to adjust by expanding to other markets in order to diversify risk.
Furthermore, competition from the influx of cheap, substandard Chinese goods might surge as China seeks new markets.
Meanwhile, many economists and analysts have voiced concerns that the imposition of high tariffs will hurt both the US economy and other economies.
Thanavath Phonvichai, president of the UTCC, predicts a potential decline in Thailand’s GDP growth in 2025 by around 1 percentage point, equivalent to $4.5 billion or 160 billion baht.
The UTCC estimates that the value of Thailand’s exports will decrease by 0.87%, or by around 160 billion baht from the heightened trade restrictions envisioned by Trump.
However, Thailand also has an opportunity to expand its market share in the US by substituting Chinese products, particularly when it comes to machinery, electrical appliances, and rubber products due to the potential for a US-China trade war.
The UTCC projects overall export growth of 3.2% this year, exceeding the government’s target of 1-2%, with the total export value expected to reach $294 billion.
The UTCC predicts export growth of 2.8% in 2025, with the export value projected to reach $302 billion, driven by an expansion of global trade and the global economy, falling inflation, a reduction in interest rates and a recovery of consumption in many countries.
However, Thai exports are likely to face significant challenges next year due to the anticipated US import tariff hike, escalating geopolitical conflict, and economic slowdowns in the US, China and Japan.
Major export products in 2025 will include electronics, rubber and rubber products, machinery, fresh and frozen fruits, and gems. Major export markets in 2025 will include the US, Southeast Asia, Europe, India, and Australia.
Mr Thanavath said next year would be fraught with uncertainty because of the ongoing trade war, which may prompt businesses to stockpile goods if they fear a Trump presidency would mean an additional 10% import tax.
He proposed the government introduce economic stimulus measures such as reviving the “Shop Dee Mee Kuen” (shop and payback scheme) to increase year-end spending, which is projected to be able to create a multiplier effect of 3-5 billion baht.