Thailand’s Ministry of Commerce is optimistic about exports under Trump, predicting 4-5% growth. However, concerns grow over the impact of Trump’s “America First” policies, including tariffs, U.S.-China tensions, and potential setbacks for Thailand’s recently emerging green energy and innovation sectors.
Towards the end of the week, which saw former U.S. President Donald Trump secure an emphatic return to the White House, Commerce Minister Pichai Naripthaphan came out bullishly predicting a surge in Thai exports to the United States. The minister predicted that Thai exports would grow by 4-5% per annum and subsequently power the wider economy. Undoubtedly, this is perhaps too optimistic. Just hours before the poll results came in, Minister of Finance Pichai Chunhavajira made it quite clear that a Trump ‘One Man Show’ that America represents as a world player would be more detrimental to the kingdom than a Kamala Harris win. The finance minister warned of impeded world trade and a loss of inward investment by U.S. firms. At the same time this week, the National Economic and Social Development Council (NESDC) called on the government to reevaluate its economic policies in light of a massive shift in policy in the United States.
Thailand’s Ministry of Commerce is optimistic about the kingdom’s economic prospects as Donald Trump returns to the White House. Minister Pichai Naripthaphan believes Trump’s policies could boost Thai exports. However, some government agencies had warned that a Trump victory could lead to challenges in global trade, especially with China.
Finance Minister Pichai Chunhavajira echoed this concern just hours before the election results emerged. He argued that a Kamala Harris win would likely have been more beneficial for Thailand’s trade environment.
Harris’s trade approach would have been more beneficial for Thailand amid balancing U.S.-China relations
Harris’s approach would have been more open to trade and less confrontational toward China. Since the 1970s, Thailand’s economy has benefited from balanced trade relations with both the U.S. and China.
Now, with Trump’s policies discouraging U.S. investment abroad, Thailand may need to adapt. Thailand may for instance need to rethink decades of accepted wisdom.
Trump is adamant about targeting the United Nations and its global agenda, particularly climate change policies. His staff at Mar-a-Lago, his headquarters in Florida, suggests that executive orders are being prepared.
Thailand’s National Economic and Social Development Council warns of risks under Trump’s “America First”
The U.S. will likely withdraw from the 2015 Paris Accord once again. At the same time, the green industry, including energy and carbon credit trading, faces serious challenges.
A recent report from the National Economic and Social Development Council (NESDC) warned of potential risks under Trump’s “America First” approach.
This approach emphasises U.S. national interests and may hinder Thailand’s economic stability. According to Finance Minister Pichai Chunhavajira, Thailand must monitor and respond to U.S. policies closely.
Trump’s tariffs and U.S.-China trade war could disrupt Thailand’s trade but also present export opportunities
One key concern is Trump’s tariff policy. He has proposed a 60% tariff on Chinese imports to the U.S. and 10-20% on imports from other countries.
The International Monetary Fund (IMF) has warned that such aggressive tariffs could shrink global trade by 7%. Thai officials worry that a renewed U.S.-China trade war will hurt Thailand’s economy.
However, Commerce Minister Pichai Naripthaphan sees potential gains if Thai exports to the U.S. increase. Minister Pichai predicts a 4-5% rise in Thai exports to the U.S. if Chinese manufacturing shifts to Thailand.
He expects Chinese companies may use Thailand as an alternative production base to avoid U.S. tariffs.
However, there are limitations, particularly in industries like electric vehicles (EVs). U.S. protectionism could block Thai-made EVs from entering the U.S. market.
Similar restrictions on solar panels occurred under the previous U.S. administration, though they were lenient for a time. Trump’s administration is expected to take a tougher approach.
Thailand moves to defend its solar energy sector from a US probe into Chinese-linked firms here
Government targets failing manufacturing base with a carbon tax on output to fight climate change crisis
As U.S.-China tensions grow, Thailand faces uncertainties in the technology and innovation sectors. Trump’s policies may slow technology transfer from the U.S., hindering Thailand’s Industry 4.0 development. Access to advanced technologies like semiconductors and 5G may also be delayed.
Thailand’s strategy to diversify export markets and focus on innovation to mitigate risks from U.S. policies
To mitigate these risks, Thai agencies recommend diversifying export markets beyond the U.S. They also advise Thai businesses to upgrade products and focus on innovation. At the same time, the United States is Thailand’s largest export market, representing 13% of goods and services sold abroad last year.
At the national level, Thailand should invest in infrastructure and workforce development, particularly in clean energy and technology sectors. Strengthening partnerships with other countries in the Asia-Pacific region could help build resilient supply chains.
Thailand’s green energy ambitions may face setbacks under Trump’s administration. Trump’s rollback of Biden-era climate policies could undermine Thailand’s progress in green energy and the circular economy.
The European Union has urged Thailand to adopt stricter environmental standards, adding pressure as Thailand navigates global trade norms.
For instance, the European Union’s green policies are set to impact long-haul flight costs to Thailand. At the same time, it is encouraging Thailand to adopt sustainable tourism policies. Certainly, it is hard to see how Thailand can cope with a sudden divergence in the global consensus.
In effect, Trump is heralding a free-for-all era. In essence global competition and innovation as opposed to multilateral planning. Thailand’s involvement in a global tax levelling system may also be affected.
Trump has proposed reducing U.S. corporate taxes to 15% and replacing income tax with tariffs. These changes could disrupt international tax coordination efforts, which may force Thailand to adjust its own trade and tax policies.
Trump’s confrontational stance toward China could destabilise the region and impact Thailand’s economy
Trump’s confrontational stance toward China could challenge Thailand’s balanced diplomatic relations with Beijing and Washington. The ongoing tensions over Taiwan may escalate, potentially destabilising the region.
If China faces economic strain, it may adopt a more aggressive foreign policy. In turn, this could significantly impact Thailand’s economic ties with both the U.S. and China.
Of course, it is far more likely that Beijing will firstly attempt to wait out the Trump presidency. In particular, to see how a more radical defensive tariff regime may negatively impact the American economy. Certainly, this may also be Thailand’s approach.
Ung Ing congratulates Trump as Thailand uneasily confronts the meaning of his second Presidency
Indeed, Thailand’s response to these policy shifts will be critical. Minister Pichai Naripthaphan has already directed Thai trade offices worldwide to identify new trade opportunities.
On November 25-27, a delegation of U.S. business leaders will visit Thailand to explore investment opportunities. This visit could boost industries such as hard disk production and processed goods.
The Ministry of Commerce remains optimistic, expecting Thai exports to grow by 4-5%, with GDP following a similar trajectory.
However, officials remain cautious. Any gains in U.S.-Thai trade must be weighed against potential losses in trade with China. In fact, Thailand’s GDP faced severe negative impacts from 2017 due to the U.S.-China trade war. Certainly, Trump 2.0 does not bode well for the kingdom unless it radically changes course.
Join the Thai News forum, follow Thai Examiner on Facebook here
Receive all our stories as they come out on Telegram here
Follow Thai Examiner here
Further reading:
Ung Ing congratulates Trump as Thailand uneasily confronts the meaning of his second Presidency
Paetongtarn’s government set to tackle the evil of chronic debt in Thailand as the tide still rises
Srettha’s crisis is not just an economic one, it is a ‘3D debt crisis’ that is strangling GDP growth
Zombie Thai firms holding back economic growth as they struggle just to pay interest on bank debt
Incoherent government economic policy clashes with Bank of Thailand’s efforts to rein in debt
Economy is in troubled waters with fears for both exports and foreign tourism as 2023 winds down
Thailand faces an economic future of low growth despite Srettha’s plans because of a darker world
Another dip for the baht or are economic danger signals flashing for both Thailand and the world?
Police chief confirms 2 dead with reports of at least one more fatality in Bangkok mass shooting
