Thailand vows to cut US trade surplus as it sees US$8 billion hit
With Trump raising tariffs on Chinese products, Thai business groups have warned the region’s second-largest economy also risks an influx of cheap goods from its Asian neighbour
[BANGKOK] Thailand pledged to narrow its trade surplus with the US by importing more energy and food products, with officials estimating the hit to the South-east Asian nation’s exports at about US$8 billion if the Trump administration raised tariffs by 11 per cent.
Prime Minister Paetongtarn Shinawatra’s government has prepared a strategy to cope with reciprocal tariffs scheduled to be announced by US President Donald Trump on Wednesday (Apr 2), Vuttikrai Leewiraphan, permanent secretary at the Ministry of Commerce, told a briefing in Bangkok. Thailand will adopt a “holistic approach” to trade negotiations to minimise the impact on its economy, he said.
Thailand’s trade surplus with the US totalled US$45 billion last year, according to the Office of the US Trade Representative. Unlike Vietnam and India, which have cut import taxes on US products to narrow their trade gaps, Paetongtarn’s administration has waited to see the US announcement first and wait for negotiations.
The US is Thailand’s largest export market with electronics, machinery and agricultural products topping the list of goods. With Trump raising tariffs on Chinese products, Thai business groups have warned the region’s second-largest economy also risks an influx of cheap goods from its Asian neighbour.
Trump’s deliberations over his plans to impose reciprocal tariffs are coming down to the wire, with his team said to be still finalising the size and scope of the new levies he is slated to unveil on Wednesday afternoon.
Still, trade-reliant Thailand stands to be the biggest loser in the region given its large exposure to the two sectors most vulnerable to reciprocal tariffs: agriculture and transport, according to Nomura Holdings. The nation has a 6.2 per cent weighted average effective tariff on US exports to Thailand, versus a 0.9 per cent tariff rate on Thai exports to the US, Nomura estimates.
Thai food and energy companies plan to step up US investments, especially in the “red states”, Vuttikrai said, referring to Republican controlled states. Investment by Thai companies in the US total about US$17 billion, helping generate about 11,000 jobs, he said.
In addition to importing more from the US, he also said the government has prepared proposals that include cutting US import tariffs for some products and offering unspecified non-tariff measures. The US decision to raise tariffs on steel and aluminium have already hit Thai shipments, with fresh orders drying up, Vuttikrai said. In the future, Thailand will diversify its export markets to offset the hit from US tariffs, he said. BLOOMBERG
Share with us your feedback on BT's products and services
