A worried Thai private sector is monitoring possible major changes in US trade policy when president-elect Donald Trump takes office on January 20. Trump’s “Make America Great Again” approach could have both positive and negative impacts on the Thai economy, especially Thai exports.
Kriangkrai Thiennukul, president of the Federation of Thai Industries, points out that, under a “reshoring” policy, American manufacturers will be incentivised to relocate their production facilities from other countries, many in Asia, back to the US.
He cited US funded cloud data centre projects in Thailand, which may be affected by this reshoring policy, saying that a US company has already sought investment incentives from the Thai Board of Investment, but a facility has not yet been built here.
Projects related to clean energy and environmental protection will be affected, he said, if the Trump administration turns its back on the Paris Agreement and increases more investment in fossil fuel-based energy.
On the other hand, Kriangkrai noted that, during the presidential election campaign, Trump threatened to impose 60%-100% import tariffs on Chinese-made products and that this may prompt Chinese investors to relocate their production from China to other countries in ASEAN, such as Thailand and Vietnam.
The Trump administration will, however, be watching this potential move closely and may impose high import taxes on products exported to the US from these countries. This could affect Thai-branded products manufactured through Thai investment.
Sanan Angubolkul, president of the Thai Chamber of Commerce said that the relocation of production facilities from China to ASEAN countries, such as Thailand, would benefit Thailand, as he urged the government to encourage Chinese entrepreneurs to invest in Thailand, in the semi-conductor industry, electric car and clean energy industries for example.
He urged the government to speed up implementation of an environment which accommodates long-term foreign investment in Thailand and to promote greater use of local content.
Meanwhile, Industry Minister Akanat Promphan said that Thailand is one of a number of countries which have enjoyed trade surpluses with the US and is, therefore, targeted for special monitoring.
He suggested that Thai businesses brace for potential trade retaliation by the US, which already sees the country as a production base for Chinese manufacturers.
