Thailand Fears US Trade War, Predicts Economic Hardship
Bangkok—Anxiety is mounting within Thailand’s business community over the unpredictable nature of US trade policy under the Trump administration. This has prompted calls for decisive government action and the establishment of a specialized “war room” to mitigate potential damage. The Thai Chamber of Commerce voiced these concerns on Thursday, urging a swift review of import tariffs on American goods and a boost in imports to address the significant trade imbalance between the two nations. This comes as global trade disputes continue to escalate, casting a shadow over the economic outlook.
The urgency of the situation was underscored by Poj Aramwattananont, the chamber’s vice-chairman, who stated, “If asked if we are panicking about the US, we must be panicking because they are our number one export market.” Time is of the essence, he emphasized, warning that a failure to react promptly and officially could lead to significant difficulties. The chamber aims to formulate a balanced and equitable response that safeguards the interests of all parties.
The catalyst for this growing unease is a trade memorandum signed last month by US President Donald Trump, directing federal agencies to conduct comprehensive reviews of various trade matters by April 1st. Crucially, these reviews include analyses of persistent US trade deficits, a key concern of the Trump administration. The President has also proposed the implementation of reciprocal tariffs on countries exhibiting large trade surpluses with the US, slated to take effect as early as April 2nd. This poses a considerable threat to Thailand, which currently levies an average tariff of 8.2% on US goods, compared to the 2.4% imposed by the US on Thai imports. This asymmetry places Thailand squarely in the crosshairs of potential retaliatory tariffs.
The United States holds a pivotal position in Thailand’s export landscape. Last year, it absorbed 18.3% of Thailand’s total exports, amounting to $54.96 billion. This reliance on the US market makes Thailand particularly vulnerable to shifts in US trade policy. According to the Thai commerce ministry, the country enjoyed a $35.4 billion trade surplus with the US last year. However, the ministry has also acknowledged the challenges posed by uncertain US trade policies to future export growth.
To address this precarious situation, the Thai Chamber of Commerce has proposed the creation of a dedicated “war room”—a centralized hub for strategizing and responding to potential trade threats—and the formation of a specialized working group to collaborate with the government on navigating the complexities of US trade policy. The chamber suggests that increasing imports of American energy, agricultural products, and aircraft could be a viable strategy for reducing the trade imbalance and potentially easing tensions. This proposal reflects a proactive approach to finding solutions and mitigating the risk of damaging trade sanctions.
The potential ramifications of these trade disputes are significant for the Thai economy. Increased tariffs on Thai exports could severely impact businesses and disrupt established trade flows. The situation highlights the delicate balance between protecting domestic industries and maintaining vital international trade relationships in an increasingly interconnected global economy. The coming weeks will be critical for Thailand as it seeks to navigate these turbulent waters and safeguard its economic interests.
