Thailand’s economy will face more challenges and uncertainties this year, due to an intensified trade policy by the incoming Trump Administration against countries which enjoy substantial trade surpluses with the US, Thailand included, according to Dr. Kirida Phaophichit, research director for International Economics and Development Policy at the Thailand Development Research Institute (TDRI).
Trump’s “Make America Great Again” trade policies will cause a global economic slowdown, which will impact Thai exports to the US market, as well as markets in Japan and the European Union, because the economic growth of these countries will slow down and Thailand’s export growth this year may register 1-2%, compared to 4-5% in 2024, according to Dr. Kirida.
Thailand may see increased tariffs on products exported to the US or be forced to buy more US-made products, such as pork from pigs fed with leanness enhancing agents, which are prohibited in Thailand, she said, adding that this will adversely affect Thai pig farmers.
Dr. Kirida said that China, which will be most affected by Trump’s trade measures, will try to find alternative markets, including Thailand, for its surplus products, such as petro chemicals, steel, plastics and garments.
She said that there are, however, both positive and negative impacts from increased Chinese goods flooding the Thai market, adding that Thai industries reliant on imported raw materials and machinery may benefit from this trend.
Another positive effect is that investors from China or other countries, which become hard hit by new trade sanctions, may relocate their production bases to Thailand to avoid the full impacts of the new tariffs, said Dr Kirida, adding, however, that this may put Thailand at risk of further restrictions from the US administration.
Since the new trade policies may last for the four years of the Trump administration, she recommended that the Thai government takes precautionary steps to cope with the potential impacts, as well as unpredictable crises, such as sudden oil price jumps, natural disasters or another pandemic.
She said that the government must have sufficient reserves to cope with emergency situations which, in turn, means that the government must spend its budget wisely and efficiently for sustainable development and not on short-term populist policies.
