Thailand’s exports exceeded expectations in February, boosting optimism as officials prepare to negotiate with the US to avoid retaliatory tariffs set for April 2nd. The government hopes a deal will ease trade tensions and maintain strong economic ties with Washington.
There was some good news on Friday for the Thai economy as exports exceeded expectations. At the same time, Minister of Commerce Pichai Naripthaphan is growing more upbeat about Thailand’s prospects of negotiating the threatened Trump tariffs due on April 2nd. Indeed, the minister’s optimism was endorsed on Tuesday after US Treasury Secretary Scott Bessen spoke to Fox Business News stateside. Mr. Bessen suggested that the United States was certainly hoping to do a deal with countries willing to address the superpower’s trade concerns.
Thailand’s Ministry of Commerce on Friday revealed a startling jump in exports for February. At length, they rose by 14%.
Notably, it marks the eighth consecutive month of export growth for Thailand. Indeed, the surge exceeded market expectations.
A Reuters analyst poll previously predicted a 9.7% increase. Before that, January had already shown strong momentum with a 13.6% rise.
At length, Commerce Minister Pichai Chunhavajira expressed optimism about the country’s trade outlook. In particular, he suggested that exports may advance by 10% in the first quarter of 2025.
Exports to the US and China show strong growth, shile rice exports decline sharply in February
In February, exports to the US grew by 18.3% year-on-year. Shipments to China also saw a strong increase of 22.4%. Rice exports, however, experienced a sharp decline.
“Exports were very good, we are satisfied,” he said during a press briefing. Exports are crucial for Thailand’s GDP and make up 60% of output. In particular, the United States is Thailand’s largest export market.
Nonetheless, rice export volumes dropped by 33.1% in February compared to the previous year. Thailand, the world’s second-largest rice exporter after India, is expected to ship 7.5 million tonnes in 2025.
Certainly, this will be a significant reduction from the 9.95 million tonnes exported in 2024. The decline follows India’s resumption of rice exports. At the same time, Mr Pichai noted that rice and agricultural exports should pick up in the second quarter.
The Ministry of Commerce remains hopeful that overall exports will exceed the projected 2% to 3% growth for 2025.
“It’s possible that exports will be higher than 3%. Agricultural products will return to positive in the next quarter,” said Poonpong Naiyanapakorn, head of the Trade Policy and Strategy Office.
Thailand monitors US Reciprocal tariffs set for April 2nd as potential impact on trade looms over the economy
Despite the strong export performance, Thailand is closely monitoring global trade uncertainties. One key concern is the possibility of reciprocal tariffs from the United States. April 2nd is undoubtedly a key date for all world economies.
After that, the Trump administration plans a new reciprocal trade policy. Basically, this means tariffs on countries exactly equivalent to what they charge the United States. Thailand, therefore, is working to reduce its bilateral trade surplus with the US.
This stood at $35.4 billion in 2024. On Tuesday, US Treasury Secretary Scott Bessent suggested that Washington may offer trading partners a chance to negotiate before imposing tariffs.
Speaking to Fox Business News, Mr Bessent indicated that each country would receive a proposed tariff rate based on various trade factors. “For some countries, it could be quite low, for some countries, it could be quite high,” he said.
He confirmed Trump’s reciprocal tariff plan will take effect on 2 April. However, Mr Bessent suggested that there may be room for negotiation before duties are imposed. “We are going to go to them and say, ‘Look, here’s where we think the tariff levels are… if you will stop this, we will not put up the tariff wall,’” he explained.
Thailand prepares to negotiate with US on trade issues ahead of April tariff imposition, offers to buy US imports
Consequently, it would appear Thailand has an opportunity. Indeed, one which Commerce Minister Pichai is already prepared for. Mr Pichai previously expressed hope that Thailand will not face US tariffs.
Indeed, he has been actively discussing trade policies with the private sector and is eager to engage with US officials.
“We’re waiting for them to respond,” said Vuttikrai Leewiraphan, the ministry’s permanent secretary. “The negotiation guidelines are all ready, whether it is about products, trade, investment, or security issues. It will be in a package.”
In light of the need to reduce its trade surplus with the US, Thailand is looking to increase imports from the country. Mr Pichai spoke about this strategy later on Friday, stating that boosting imports from the United States could help Thailand avoid trade tensions.
Imports in February rose by 4%, lower than the forecasted 4.8% increase. In effect, this resulted in a trade surplus of ฿2 billion, surpassing expectations of a $0.7 billion surplus.
Thai officials remain optimistic despite US trade uncertainties and global economic challenges ahead
Despite the uncertainty surrounding US trade policy, Thailand’s trade officials remain optimistic. Mr Pichai was upbeat about Thailand’s prospects for 2024 and beyond.
The Ministry of Commerce continues to focus on expanding trade partnerships and leveraging free trade agreements to support economic growth. The broader global trade outlook remains uncertain.
The Trump administration has identified key industries, such as steel and aluminium, as priorities. In short, America is determined to bring manufacturing back to the US. In truth, this is a security policy as well as an economic one.
The Ukraine war has exposed the lack of an industrial base as a key factor in each country’s defensive capabilities.
US tariffs and potential disruption of global supply chains remain key concerns for Export economies like Thailand
Meanwhile, Trump’s tariffs have been framed as a way to raise revenue and balance trade deficits. In addition, they pressure other nations into fairer trade practices. Economists warn that tariffs could disrupt global supply chains.
While they can raise government revenue, they may also shift demand away from foreign suppliers. In turn, this could lead to unintended economic consequences, particularly for export-reliant economies like Thailand.
Mr Bessent acknowledged these concerns but remained confident in the US economy. He stated that there is “no reason” for a recession, adding that the underlying economic conditions remain strong.
Thailand waits on new Trump retaliatory trade tariffs to be launched within hours from the White House
Trump Presidency already having a heavy impact on Thailand even before he talks trade with Bangkok
Thailand is now preparing for potential negotiations with the US. Officials hope to reach an agreement. Firstly, they are hoping to maintain strong trade relations while secondly, avoiding the negative effects of tariffs.
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Further reading:
Trump Presidency already having a heavy impact on Thailand even before he talks trade with Bangkok
Trump Presidency already having a heavy impact on Thailand even before he talks trade with Bangkok
Economy sees sharp setback with lower private spending, investment and foreign tourism income
Trump’s trifecta triumph means Thailand will be more on edge as he prepares to take power in January
