Thailand warned to tread carefully as it weighs US concessions in escalating Trump trade war. Stock markets reel, GDP growth at risk while Thai exports face a major hit. Crisis talks loom as the government scrambles to protect the economy and domestic industry.
A key advisor to Prime Minister Paetongtarn Shinawatra on Monday advised her to be cautious about offering concessions to the Trump White House. It comes as the Prime Minister prepares to convene a crisis summit at Government House. It also comes amid a day of stock market routs and rising reaction to the massive trade war sparked by US President Donald Trump last Wednesday. One key concession being offered by Thailand is to block the re-export of Chinese goods using Thailand as an export base.
Key advisor to Prime Minister Paetongtarn Shinawatra, Supawut Saicheua, spoke on Monday about Thailand being careful about what it offers the United States. It comes as reciprocal tariffs went into effect on Saturday, with the high-level country-specific rate impacting on Wednesday.
Certainly, on Monday, stock markets around the world reeled. This is because it became clear the Trump administration is determined to push through on the tariffs.
Indeed, onboard Air Force One on Sunday, Trump told reporters that “sometimes you have to take medicine to fix something.” Afterwards, this line spread on news wires.
Trump insists tariffs will fix trade imbalances despite market collapse and fears of a global recession
Speaking further to reporters aboard the presidential aircraft, Trump insisted he could not foresee market reactions. Meanwhile, he denied he was intentionally engineering a sell-off. “They’re dying to make a deal,” he claimed, referring to world leaders seeking exemptions or negotiations to avoid the brunt of new duties.
Consequently, on Monday Asian markets nosedived with some losses down by 10%.
In Japan, the Nikkei 225 fell a staggering 6.5% in early trading. Stocks in Taiwan were also off nearly 10%, while Singapore markets dropped 8.5%. Futures contracts in the United States pointed to a painful open on Wall Street, and US oil dipped below $60 a barrel for the first time since April 2021.
In brief, this is the world market signalling a recession.
Meanwhile, in Bangkok on Monday, ministers and officials were preparing for a top-level meeting on Tuesday. Ministries and top government officials will review Thailand’s position with the prime minister. In the meantime, Deputy Prime Minister Pichai Chunhavajira is preparing to travel to the United States.
Thai leaders to hold emergency talks as oil dips and Asian stock markets signal global economic crisis
Thailand is ready to make overtures and concessions to America. For instance, it will suppress exports from other countries, particularly China, using Thailand to re-export goods.
Significantly the government is in effect now admitting that this was happening. At the same time, it says it can be halted by refusing to certify non-Thai goods. Therefore, it is anticipated that this will help reduce the trade deficit.
However, it highlights a growing problem Thailand is experiencing with China.
In addition, the kingdom is presently flooded with cheap Chinese outputs. These goods, often at subpar standards, undermine Thai manufacturers.
Thailand has seen a drop in manufacturing output both in 2023 and 2024, with figures of 4.9% and 1.79% respectively. Industry bodies such as the Federation of Thai Industries (FTI) attribute this to cheap Chinese imports.
Thailand plans to block Chinese re-exports as domestic industry suffers under dumping and lost output
Vietnam, facing a 46% tariff, has formally requested a 45-day delay in the implementation of US duties, joining a growing list of countries seeking compromise. This is another alternative export base for Chinese firms.
The Trump administration has confirmed that more than 50 countries have reached out to open negotiations, according to both White House economic chief Kevin Hassett and Treasury Secretary Scott Bessent.
Finally, Chinese firms using grey capital are infiltrating Thailand’s economic sectors. Indeed the consequences are punishing.
This has been particularly highlighted by a growing scandal linked to China Railway Group (CREC). This was the company behind the Chatuchak building collapse on March 28, after an earthquake in which it is feared up to 94 people perished.
In addition, Thailand is ready to purchase more US agricultural products. At the same time, this is already sparking protests from 200,000 Thai pig farmers. Thailand also plans to invest more extensively and purchase US aircraft.
Vietnam joins nations pleading for delay as Thailand scrambles to balance concessions and public anger
Over the week, Mr. Pichai suggested that Thailand may also lower its tariff rates on certain sectors.
Meanwhile, as Mr. Pichai prepares for his US visit, Mr. Supawut, an aide to the PM on the export crisis, today, urged caution. He suggested that Thailand may also make an offer but must be prepared to be patient.
The canny Thai advisor suggests that presently many countries are retaliating against the US moves. Furthermore, the stock market is being hit, as are large business concerns, particularly US firms. Therefore, he urged that Thailand issue a ฿3 billion subsidy to support exporters to hold the line.
Nevertheless, the stakes for Thailand are high. The extent of losses could reach up to $15 billion. That is according to a frightening Federation of Thai Industries (FTI) estimate over the weekend.
Thai exports crisis deepens as advisor urges restraint and FTI warns of a staggering $15 billion loss
In short, Thailand could find itself plunged into recession, with the prospects of GDP growth in 2025 wiped out. Indeed, this particular crisis has been difficult to predict given what we are now learning about Thailand’s export figures.
Indeed, it may help explain why GDP growth in the Thai economy, although modest since 2022, is not feeding into liquidity in the system.
Peter Navarro, a key proponent of the tariff policy inside the Trump White House, on Monday attempted to ease market fears. In particular, he told investors that “you can’t lose money unless you sell” and predicted “the biggest boom in the stock market we’ve ever seen.”
Meanwhile, Trump staffers have been emphasising that more and more countries have reached out to the United States for talks. Among them is Israel, which has been hit with a 17% duty. Israeli President Benjamin Netanyahu will fly to Washington DC this week.
Thai GDP growth faces wipe-out as White House scrambles to calm global fears over economic fallout
On Friday, China imposed its own 34% tariff on US imports, joining Canada and Mexico in a more hostile stance. The European Union, which was hit by a lower 20% tariff rate, is reviewing the situation while engaging in talks.
Similarly, the United Kingdom, which only had a trade surplus of £2.1 billion with the United States in 2024, on exports of £58.7 billion.
Therefore, according to the US tariff calculation formula, the tariff should have been 3.6%. However, Trump imposed a blanket 10% on all countries and territories last weekend.
PM addresses the nation in shock over last week’s earthquake and this week’s Trump tariff bombshell
Industry warns the impact of Trump’s tariffs could be cataclysmic. Opposition MPs criticise, inert confusion
Finance Minister to travel to the US to import more US food and motorbikes while lowering Thai tariffs
Trump stuns Thailand with a shocking 36% tariff on all imports to the US. GDP growth faces a wipe-out
As Prime Minister Keir Starmer of Britain warned in a weekend editorial, “the world as we knew it has gone,” and the new reality hinges on “deals and alliances.”
The global economic order is under stress, and nations are now recalibrating their strategies to navigate what some experts have already begun calling the “tariff era.”
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Further reading:
PM addresses the nation in shock over last week’s earthquake and this week’s Trump tariff bombshell
Finance Minister to travel to US to import more US food and motorbikes while lowering Thai tariffs
Trump’s trade war coming down hard on Thailand despite reports of talk. Reciprocal tariffs days away
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
