Thailand should diversify its export markets, lower trade barriers on US goods and pursue more free trade agreements (FTAs) to cushion the impacts of US tariffs, a leading Thai economist has urged.
She warned that the country’s GDP growth could slow to just 1.5% in 2025.
Dr. Kirida Bhaopichitr, Research Director for International Economics and Development Policy at the Thailand Development Research Institute Foundation (TDRI), said the new US tariffs, 36% in the case of Thai products, pose a serious challenge to the country’s economic momentum.
“The economy is unlikely to enter a crisis, but growth will be delayed,” she said, adding that the Stock Exchange of Thailand (SET) Index fell 4.5% on Monday this week, as investor concerns mounted.
“President Trump’s tariffs have disrupted the global economy, but this is not a crisis like the (COVID) pandemic, when economic activity came to a halt. This time, growth is simply being slowed down,” the economist noted.
To mitigate the risks, she recommends that the Thai government expand its export base beyond the US, which currently accounts for nearly 20% of all Thai exports, adding that “the remaining 80% of our export markets are just as important,” calling it an opportunity to increase trade with other partners.
She also advised a reduction in tariff and non-tariff barriers on US-made goods, as a strategic gesture to ease tensions and open room for negotiation.
“Negotiating with the US, to avoid further tariff hikes, is crucial,” Kirida said. “Lowering non-tariff barriers, such as import quotas and standards, should be considered carefully.”
At the same time, Thailand should focus on developing niche specialisations in products in which neighbouring countries do not yet dominate, she said.
One possible approach is to import raw materials, like soybeans or corn, from the US, add value through local processing, and re-export the finished products to other markets.
“That strategy could continue to attract foreign direct investment,” she added.
Dr. Kirida also noted that the global trade landscape is shifting rapidly. “Trump’s tariff policies have disoriented the global trade system,” she said, adding “We are now seeing the emergence of four major trade blocs.”
She explained that, while the US risks becoming increasingly isolated, China is expected to align with its own partners, while the EU, Japan, Australia and South Korea may form another bloc.
In this climate, Thailand should maintain a neutral stance and strengthen ties across all camps and FTAs will be key to securing more partners, she said.
“Thailand has already signed an FTA with Bhutan, and negotiations with the EU are ongoing,” she noted.
By Franc Han Shih, Thai PBS World
