Pichai set to visit Trump’s Washington in February as Thai exports surged 14.6% in October, smashing forecasts. Despite this, rising imports signal a third year of trade deficit, prompting efforts to attract U.S. investment and secure stronger trade ties.
Thailand’s exports recorded a sharp rise in October, smashing a Reuters poll forecast. In effect, the country is on track for a 4% rise in output in 2024. However, imports have been rising at a faster rate, with the country likely to record a third year with an increased trade deficit. The news came as Commerce Minister Pichai Naripthaphan met with leading US firms this week ahead of his February 2025 visit to Washington, DC. Thailand is eager to build a strong rapport with the second Trump administration. The goal is to attract more US firms to invest in Thailand and become part of America’s worldwide supply chain.
On Tuesday, Thailand reported a trade deficit for October but significantly increased exports for the month. Indeed, the figures released by the Ministry of Commerce were well ahead of an earlier Reuters poll. That poll estimated a rise of only 6.5%.
The press was briefed on the performance by Trade Policy and Strategy Office Chief, Poonpong Naiyanapakorn.
In brief, Thailand’s exports were up 14.6% compared to the same period last year. This growth was driven by technology exports such as computers, hard drives, equipment, and components. The Reuters projection was only 6.5%.
The final tally of goods exported was valued at $27.22 billion.
Thailand reports increased exports in October but faces challenges with growing trade deficit
The Commerce Ministry, under Minister Pichai Naripthaphan, is determined to preserve and enhance Thailand’s exports. These currently represent 65.4% of GDP and, alongside foreign tourism, are the lifeblood of the economy.
Notably, imports for October rose at an even higher pace. The kingdom imported $28.02 billion, a 15.9% increase from 2023, leaving Thailand with a trade deficit of $0.79 billion.
However, Thailand’s pattern has changed significantly from surplus to deficit since after the pandemic. The country recorded trade deficits in 2022 and 2023. Before Tuesday’s figures, the kingdom recorded a trade deficit of $5.967 billion for the first nine months.
The latter was based specifically on exports of $223.175 billion, a rise of 3.9%. In contrast, imports were $229.133 billion, a steeper rise of 5.5% from 2023. The total 10-month deficit was therefore $6.757 billion.
Thailand aims for 4% export growth as US tariff concerns loom under Trump’s second administration
Mr. Poonpong explained that the October figures leave the country well on track for a 4% increase in exports for 2024. This is significantly ahead of the 2% target suggested earlier in the year, setting the export sector up for a particularly strong fourth quarter.
This news follows the re-election of US President Donald Trump for a second term. Thai economic planners are understandably nervous about Mr. Trump’s election manifesto. At length, it proposes a 60% tariff on Chinese goods and a reported 10–20% balanced tariff on all other imports.
However, this week brought some welcome news. Trump appointed Mr. Scott Bessent as incoming Treasury Secretary. Mr. Bessent is known as a pragmatist and has suggested that Trump’s radical tariff plans will be more nuanced. Furthermore, they will be introduced gradually and selectively.
Confirming this, Trump recently announced selective tariff measures targeting China, Canada, and Mexico. Specifically, he announced a 25% rate on imports from Canada and Mexico, alongside a 10% across-the-board tariff on Chinese imports.
Analysts warn US tariffs will heighten global tensions and inflation despite resilient US economy
Nonetheless, these moves are bound to create inflamed tensions and counter-moves. Economic analysts suggest that these tariff costs will be borne by exporters, though studies indicate they ultimately contribute to higher inflation in the US.
Institutes like the Cato Institute have shown that tariff measures take time to settle and eventually lead to lower company profits or higher inflation.
Essentially, they act as an indirect tax on both consumption and manufacturing. A key factor is how American businesses handle them.
The US economy is known for its resilience and adaptability, which may explain how Trump’s first trade war stabilized into an improved economy.
In the meantime, Trump has been known to use tariff threats as a negotiating strategy, reflecting his mercantilist approach to the economy. Mr. Pichai is scheduled to visit the US in February 2025 to meet the new US Secretary of State and possibly the US President.
Trump’s second term offers opportunities and challenges for Thailand’s economic and trade strategy
Undeniably, Trump’s second administration can either be an opportunity or a challenge for Thailand. In effect, it may depend on how the Thai government interacts with the American administration.
This explains the announcement that Commerce Minister Pichai Naripthaphan will visit Washington, DC, in February 2025. The Thai minister, focused on boosting the country’s exports, was recently in Lima, Peru, alongside Prime Minister Paetongtarn Shinawatra for the Asia-Pacific Economic Cooperation (APEC) summit.
In February, he is eager to meet with the new Secretaries of State and Commerce to present Thailand’s position. A key discussion point will be Thailand’s trade deficit with the United States.
This is a fluid situation, as the trade deficit between Thailand and the US fell sharply from 2022 to 2023. For instance, in 2022, it was $41.9 billion, but in 2023 it was only ฿5.19 billion. At one point, Thailand had the 12th-largest deficit, although this is quite changeable.
Thailand’s trade deficit with the US narrows sharply as Thai exports face a challenging global outlook
The sudden drop may be explained by higher energy imports from the US in 2023. Exports to the US, Thailand’s top export market, also fell by 1% during that time.
Nonetheless, Mr. Pichai is already sending a message to the incoming US President. On Monday, the Thai minister met with representatives of the US-ASEAN Business Council (USABC). This includes 50 top US corporations, including Amazon, Apple, Boeing, Citi, Google, Mastercard, Hewlett-Packard (HP), Western Digital and Seagate.
Several technology firms like Seagate, Western Digital, Google and HP are already ramping up production in Thailand. Indeed, other US giants like Apple, through third-party manufacturers, are also increasing investment and capacity.
Mr. Pichai emphasised that during his Washington visit, he will underline Thailand’s strong diplomatic ties with the US. Additionally, the kingdom is a participant in the US Indo-Pacific Economic Framework (IPEF).
Thailand seeks to boost investment from US firms and strengthen ties under the Indo-Pacific framework
In particular, Mr. Pichai sent the message that Thailand’s exports to the US are primarily generated by American firms based in the kingdom.
Indeed, the minister noted the need to develop this direction further. Certainly, the country is targeting US investment and technology to empower its future. He also informed business leaders that Thailand expects to finalise a trade pact with the European Free Trade Association (EFTA) in January 2025.
After that, a free trade deal with the United Arab Emirates is expected to be finalised. However, the ongoing and protracted negotiations with the European Union remain a concern. Particularly as Vietnam and Singapore have already secured deals.
Executives want certainty and a stable business environment. They are also urging the government to negotiate a deal with the US.
Thailand pledges improved business climate and seeks removal from the intellectual property watchlist
On Monday, Mr. Pichai made it clear that Thailand is open for business with US firms seeking to base operations and invest.
He pledged to work toward a more favourable business climate. During his trip, Mr. Pichai is expected to seek Thailand’s removal from the intellectual property watchlist, citing consistent improvements in the enforcement of international copyright laws.
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