As trade tensions escalate between the United States and China, Thailand finds itself at a critical crossroads, navigating the complexities of international trade policies that could significantly impact its agricultural and manufacturing sectors. The ongoing trade war, often referred to as "Trump 2.0," has seen the U.S. implement high tariffs on imports, including a staggering 972% on solar panels from Thailand, which could cripple the country's export capabilities.
Poonpong Naiyanapakorn, the Director of the Trade Policy and Strategy Office (TPSO), recently highlighted the ramifications of these tariffs during a press briefing. He noted that the U.S. has increased tariffs on imported goods while eliminating the De Minimis tax exemption for Chinese products. This has prompted China to retaliate with increased tariffs on U.S. imports, creating a ripple effect that threatens Thai agricultural exports.
According to data from Trademap.org, Thailand exported agricultural products worth $4,759.5 million to the U.S. in 2024, with the top exports including dog and cat food, rice, and preserved tuna. The TPSO has categorized these exports into three groups based on their market potential and competitive advantage.
The first category includes products where Thailand holds a strong market share in the U.S., such as dog and cat food, which saw imports valued at $2,215.5 million. Thailand ranked first in this category, capturing 38% of U.S. imports. Similarly, rice exports amounted to $843 million, giving Thailand a 56% share of the U.S. rice market.
The second category consists of products where Thailand has potential but faces stiff competition from China. This includes pasta and frozen seafood, where increased production capabilities could help Thailand gain market share if tariffs on Chinese goods continue to rise.
However, the third category raises concerns about trade diversion, particularly for agricultural products that China also produces. For instance, garlic imports from China could increase as the U.S. imposes higher tariffs on Chinese goods, potentially flooding the Thai market and increasing competition for local farmers.
In a separate analysis, SCB EIC warned that if the U.S. maintains its 36% tariffs over the next five years, Thailand could see its export value plummet by approximately 800 billion baht. The analysis indicated that more than 80% of Thailand's exports to the U.S. could face these punitive tariffs, significantly undermining the country's economic stability.
Moreover, on April 28, 2025, China announced measures to support its exporters in response to the U.S. tariffs, which have already led to a 40% reduction in cargo shipments to the U.S. This move underscores the urgency of the Chinese government to stabilize its economy amid declining export orders.
Amidst these challenges, Thailand's Ministry of Commerce is actively pursuing strategies to bolster its export capabilities. Minister Phichai Naripthaphan emphasized the importance of free trade agreements (FTAs) as a means to enhance competitiveness. During a seminar in Nakhon Phanom, he noted that Thailand's exports have seen a remarkable increase, with a growth rate of 15.2% in the first quarter of 2025.
Phichai also highlighted the successful negotiations with the European Free Trade Association (EFTA), which could further increase Thailand's export opportunities in high-demand markets such as Switzerland and Norway. The Minister urged local businesses to leverage these agreements to expand their market presence.
In addition, the Thai government is implementing measures to ensure the safety and quality of agricultural products, particularly fruits like durian and mangosteen, which are vital for exports to China. Minister Narumon Pinyosinwat has called for rigorous quality control and the establishment of safe packing facilities to enhance consumer confidence.
Despite the challenges posed by the trade war, there is a silver lining. The TPSO is optimistic that Thailand can capitalize on the current situation by improving product quality and diversifying its export markets. This includes enhancing production capabilities and exploring new trade partnerships in regions that are not affected by the U.S. tariffs.
As Thailand navigates these turbulent waters, the focus remains on maintaining its competitive edge in the global market. The government is committed to supporting local producers and ensuring that Thai products meet international standards. By fostering innovation and sustainable practices, Thailand aims to not only survive but thrive in the face of mounting trade pressures.
In conclusion, while the U.S.-China trade war presents significant challenges for Thailand, it also offers an opportunity for the country to reassess its trade strategies and strengthen its position in the global market. Through strategic planning, collaboration, and a commitment to quality, Thailand can emerge from this crisis with a more resilient and competitive economy.
