As the global economy grapples with rising trade tensions and fluctuating currency values, Thailand's export landscape is facing significant challenges. Recent developments, particularly the reintroduction of tariffs by U.S. President Donald Trump, have created a complex environment for Thai exporters, who now find themselves navigating through a maze of uncertainties.
On April 2, 2025, Trump announced a substantial 36% increase in tariffs on imports from countries that have trade surpluses with the U.S., including Thailand. This decision was initially set to take effect immediately but was postponed for 90 days for countries that did not retaliate against U.S. tariffs. Mr. Visit Limlurcha, the Honorary President of the Thai Food Processors Association, emphasized that this delay allows importers to continue purchasing goods, providing a temporary reprieve from the immediate impacts of the tariffs.
"The postponement of the tariff increase gives importers a chance to place orders continuously from the first trimester, as many had previously delayed purchases due to the impending tax hike," Mr. Limlurcha noted. However, he cautioned that the actual benefits may be limited due to storage constraints and increased costs associated with holding inventory.
Despite the short-term relief, the outlook for Thai exports remains clouded. Analysts suggest that the second half of the year could see a significant slowdown in export growth. Mr. Limlurcha pointed out two critical scenarios: if tariffs are uniformly increased across all countries, Thai products could potentially replace Chinese goods in the U.S. market, particularly in food products. Conversely, if tariffs vary significantly, it could lead to a global market slowdown, exacerbating inflationary pressures in the U.S.
Additionally, the strong Thai baht is compounding the challenges faced by exporters. A robust currency makes Thai goods more expensive on the global market, further straining the competitiveness of Thai exports. "The current state of the baht is a significant hurdle, particularly as the global economy is already slowing," Mr. Limlurcha explained.
Looking ahead, the Thai government is urged to expedite negotiations with the U.S. and explore new free trade agreements (FTAs) to open up additional markets. Mr. Thanakorn Kasetsuwan, President of the Thai Maritime Exporters Council, echoed these sentiments, describing the current trade environment as a "ticking time bomb" due to the uncertainties stemming from Trump's trade policies and ongoing geopolitical tensions.
In addition to trade tensions, the Thai rice export market is also feeling the heat. Following India's decision to lift its ban on white rice exports, prices have dropped, creating a competitive disadvantage for Thai rice exporters. Ms. Nanthapong Kanthong, Director-General of the Department of International Trade Promotion, indicated that the department is actively working to promote high-quality Thai rice products such as Hom Mali and organic rice to cater to premium markets.
"We need to focus on increasing the value of our rice products to meet the demands of high-income markets like the European Union and Japan," Ms. Kanthong stated. This pivot is seen as essential for maintaining Thailand's position in the global rice market, particularly as competitors like Vietnam and India ramp up their export efforts.
As for the domestic market, the price of Thai pepper has shown signs of recovery, reflecting a growing demand as businesses adjust to the new economic realities. On April 17, 2025, pepper prices in key growing areas increased slightly, with prices ranging from 156,500 to 159,000 VND per kilogram. The increase is attributed to a combination of factors, including a recovering economy and a surge in demand from major markets such as the U.S. and China.
"The demand for pepper is expected to rise as we approach the end of the harvesting season, with many farmers and traders holding back supplies to negotiate better prices," industry experts noted. However, concerns remain about the impact of adverse weather conditions on this year’s pepper yield, particularly in regions like Quang Tri, which is expected to see a significant drop in production.
With these multifaceted challenges, Thai exporters are urged to diversify their markets and reduce dependency on the U.S. market. As the global trade landscape continues to evolve, the necessity for strategic planning and adaptability has never been more critical for Thailand's export sector.
In summary, as Thailand navigates through rising tariffs, a strengthening currency, and competitive pressures from neighboring countries, the call for proactive measures from the government and the private sector is clear. The success of Thai exports in the coming months will depend on how effectively these stakeholders can collaborate to mitigate risks and seize new opportunities in an increasingly complex global market.
