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U.S. Tariffs Threaten Thai Economy, Prompt Urgent calls for Negotiation
BANGKOK (Archyde.com) — Key sectors of the Thai economy are urging their government to prioritize trade negotiations with the United States amid escalating trade tensions and the potential imposition of notable tariffs. A proposed 36% tariff rate,substantially higher than regional and global averages,has triggered warnings of broad-based economic impacts,compounded by China’s economic slowdown and cooling investor sentiment.
Broad-Based Economic Impacts Loom
Analysts are painting a concerning picture of the potential fallout from increased U.S.tariffs on Thai goods. Chak Reungsinpinya,managing director and head of research at maybank Securities (Thailand),warned that several Thai industrial sectors could face “significant headwinds” because of tariffs.
According to Maybank Securities, sectors vulnerable to an export slowdown or increased competition from imports include electronics, automotive, and petrochemicals. The banking, finance, and commerce sectors could also suffer if economic growth declines.
“With the U.S.tariffs being imposed across the board, we see a risk that other countries, particularly china, will dump their products on the Thai market,” Chak Reungsinpinya saeid. “This could lead to Thailand increasingly relying on imports, weakening a manufacturing sector that has already experienced a significant downturn before the tariff announcement.”
The potential impact extends beyond export-oriented industries. “We expect broad-based impacts, not only for export-led sectors, but also for domestic consumption and investment,” Chak Reungsinpinya added. He suggested that Thailand could mitigate the damage by significantly reducing its trade surplus with the U.S., perhaps paving the way for lower tariffs in the medium term.
Electronics Sector Faces Significant Challenges
Naruedom Mujjalinkool, an analyst with Krungsri Securities, highlighted the particular vulnerability of Thailand’s electronics sector, noting that the U.S. is a major destination for electronic components. The proposed 36% tariff rate poses a “significant economic challenge” to this sector.
Many companies in this sector generate 20-30% of their revenue from U.S. sales.Naruedom Mujjalinkool cautioned that they could face a “significant downturn in earnings if the Thai government fails to implement solutions to mitigate the impact of U.S. tariffs.” He identified Delta Electronics (Thailand) and KCE Electronics as companies with the most significant risk exposure.
Naruedom Mujjalinkool anticipates that many of these companies’ customers are likely to delay placing new orders during the second quarter, “until the direction of the Thai government’s negotiations becomes clearer.”
Strategic Adjustments and Negotiations Urged
Poj Aramwattananont, chairman of the Thai Chamber of
