Thailand faces significant challenges due to Trump’s trade policies, with economic experts warning of potential long-term impacts. A panel discussed strategies for navigating these challenges, emphasizing the necessity for domestic strength, effective foreign currency management, and regional trade partnerships. The competitiveness of Thai exports is threatened by rising tariffs and global economic volatility.
Thailand is currently facing significant challenges due to the ongoing trade war initiated by former President Donald Trump. Economic experts warn that this confronts the Thai economy with long-term repercussions and few advantages from the new U.S. trade strategies. A recent panel discussion titled “Trade War 2025: How to Deal with Trump?” gathered representatives from the government, business, and academia to strategize on navigating the evolving trade landscape.
Don Nakornthap, who serves as the Bank of Thailand’s Reserve Management Chief, addressed the potential repercussions of this trade conflict. He indicated that if tariff increases become widespread, it could lead to another Great Depression. Mr. Nakornthap underscored, “No country can escape the tariffs being imposed by Trump,” highlighting the adverse effects on nations like China, Canada, and Mexico, while also pointing to Thailand’s growing U.S. trade surplus and its exposure to potential tariff hikes.
The impact of these policies is already apparent, with increased volatility in global exchange rates and stock markets. Countries affected by tariffs, including China, Canada, and Mexico, have seen their currencies weaken, raising concerns for the U.S. market as well, where fears of recession loom large. Don outlined three essential actions for Thailand: enhancing domestic consumption, managing foreign currency reserves, and utilizing regional trade agreements within ASEAN to bolster export opportunities.
Kobsak Pootrakool, the chairman of the Federation of Thai Capital Market Organisations, emphasized that businesses must brace themselves for ongoing trade volatility. He noted a notable decline in U.S. stock indices and fluctuations in the U.S. Dollar Index as indicators of market turbulence. Kobsak warned, “This storm will stay with us for four years,” advising investors to anticipate continued unpredictability in asset values amid shifting geopolitical conditions.
Dr. Kirida Bhaopichitr from the Thailand Development Research Institute highlighted increased risks and uncertainties the trade war imposes on global and Thai economic growth. She cited stagnant trade growth impacting export-reliant nations like Thailand and the significant role of exports and imports in its GDP. Despite these challenges, she acknowledged potential opportunities arising from market openness to U.S. imports and noted a rising flow of Chinese goods into the Thai market.
Kriengkrai Thiennukul, Chairman of the Federation of Thai Industries, confirmed that Thailand is under scrutiny from the Trump administration due to its substantial trade surplus with the U.S. He remarked on the forced relocation of investments from China prompted by heightened tariffs and emphasized the necessity for Thailand to engage in bilateral negotiations rather than multilateral agreements to maintain competitiveness.
The imposition of tariffs on Thai steel and aluminum exports threatens nearly $20 billion worth of trade each year, and there is an urgent need for Thailand to explore alternative markets given its reliance on U.S. exports. Despite a recent uptick in U.S. exports, persistent challenges loomed as the manufacturing sector faced declines.
Kriengkrai also addressed the automotive industry, warning of significant impacts due to potential tariff hikes which could disrupt production and exports. He proposed various measures for both short- and long-term adaptations, including data-driven negotiation strategies and restructuring industries to enhance capabilities in emerging technology and biotechnology.
Former senator Pisan Manawapat presented seven immediate proposals for Thai Prime Minister Paetongtarn Shinawatra aimed at reinforcing the country’s relationship with the U.S. and strategically navigating the changing trade environment. Key proposals included grasping Trump’s negotiating style and adjusting trade agreements to foster mutual benefits.
Dr. Piti Srisangnam indicated that China remains the primary focus of Trump’s trade strategy, which could disrupt Thailand’s market positioning. He warned of potential scenarios like “elephants colliding” and “elephants kissing,” predicting significant impacts on Thai competitiveness in both instances, with ongoing tariff barriers and shifts in foreign investments likely affecting the nation’s export landscape.
In summary, Thailand grapples with the repercussions of Trump’s trade policies, as economic experts forecast long-term impacts on the nation’s economy. The consensus is that increased tariffs could substantially disrupt market dynamics. Key recommendations include bolstering domestic strength, effectively managing foreign reserve dynamics, and leveraging ASEAN partnerships to increase export opportunities. Addressing these challenges will be essential for Thailand to adapt effectively to the unfolding trade landscape.
Original Source: www.nationthailand.com
