The Thai government should offer increased incentives to investors, to dissuade businesses from relocating to neighbouring countries amid escalating trade wars, suggests Vibeke Lyssand Leirvåg, Chair of the Joint Foreign Chambers of Commerce in Thailand (JFCCT).
As neighbouring countries propose the lowering of tariffs on US-made products, Leirvåg told Thai PBS World that the Thai government must work closely with the private sector during this challenging period.
“The government’s policies need to be very practical and agile. As Vietnam has proposed reducing its tariffs on US-made products to 0%, Thailand must implement tax relief measures, stimulus packages and improve loan access for small and medium enterprises,” Leirvåg opined.
The chair emphasised that financial access for SMEs remains extremely limited, due to the time-consuming processes banks use to process loan applications, delaying opportunities for new businesses seeking to establish themselves in the country.
Despite a 90-day suspension of tariffs, announced by US President Donald Trump, she noted that key industrial sectors in Thailand, such as automotive, electronics and textiles, will suffer significantly if the government does not act swiftly.
Thailand’s top exports to the United States in 2024 included computers and parts, valued at over US$10 billion, followed by printers and rubber products, each exceeding US$4 billion, according to Reuters.
When asked if current investors would consider relocating their production bases to other countries in the region, Leirvåg said that some are considering adjustments to their supply chains, but the final outcome of tariff negotiations with the US will be pivotal.
She also pointed out that the export sector will face immediate challenges if the 36% tariff on Thai goods is not reduced, adding, “A significant portion of the raw materials we use within our supply chain will increase in cost, which will raise the overall price of our products.”
With strong ties to regional economies, Leirvåg suggested that Thailand could serve as a bridge between ASEAN and South Asia, helping to tap into a consumer base of nearly 2 billion people. By signing more free trade agreements, she said Thailand could benefit through expanded export opportunities.
To preserve Thailand’s competitiveness, the JFCCT Chair underscored the importance of effective communication with the private sector, adding, “I was impressed by Vietnam’s communication with its private sector during my visit last month"
"Thailand must ensure that information on trade regulations and incentives, especially from the Board of Investment and the Eastern Economic Corridor office, is clear and transparent, to guarantee that investors receive timely and accurate information.”
By Franc Han Shih, Thai PBS World
Full interview with the Chair of JFCCT, Vibeke Lyssand Leirvåg:
