Thai exporters are being advised to prepare for increasing tariff and trade uncertainties from the US, after President Donald Trump decided to increase tariffs on all products entering the US from 10% to 15%, with immediate effect.
Pote Aramwattananont, president of the Thai Chamber of Commerce and the Board of Trade, said today that, despite the latest tariff increase, the tariff issue is not over as the US administration still has a tendency to weaponise tariffs to force its trading partners to submit to its economic and trade policies.
The tariff increase on imports from all countries into the US and their supply chains will be affected, including Thailand, said Aram, as he urged Thai exporters to monitor the situation closely, particularly currency fluctuations against the US dollar.
He noted that the uncertainty of the US economic situation may increase the risk of the devaluation of the greenback which, in turn, may strengthen the Thai currency, making Thai exports to the US less competitive, especially for manufactured products with low profit margins.
Aram pointed out that the sudden tariff increase, which takes immediate effect, has increased pressure on the Thai private sector.
Firstly, there’s the risk of increased production costs and reduced competitiveness of Thai products in the US market.
Secondly, the uncertainty of the US trade and tariff policies will make it harder for Thai exporters to conclude trade or investment deals, or to make long-term plans, because the tariff increase is only effective for 150 days.
Thirdly, Aram said that the tariff uncertainty will put pressure on investors to adjust the structure of supply chains and relocate their production bases.
He urged the government, specifically the Foreign, Finance and Commerce ministries, to speed up trade negotiations with the US, which would help the Thai private sector adjust their business plans and improve their competitiveness in the long term.
Despite the risk from the tariffs, Aram said Thailand has a strategic opportunity to upgrade its role as a trade hub or the production centre of the region.
