As the trade war between the United States and various countries escalates, Thailand finds itself navigating a complex economic landscape. Dr. Kirida Phaojichit, Director of the Economic Intelligence Service (EIS) at the Thailand Development Research Institute (TDRI), recently outlined strategies for Thailand to counter the impacts of rising tariffs and maintain its export growth amidst global uncertainties.
In a recent statement, Dr. Kirida highlighted that the U.S. has imposed a staggering 36% import tariff on Thai goods, effective April 9, 2025. This increase is part of a broader strategy by the U.S. to levy higher tariffs on imports from numerous countries, which, according to Dr. Kirida, will affect not only Thailand but also its competitors in ASEAN like Vietnam, Cambodia, Laos, and Myanmar. China faces even steeper tariffs, with a total of 54% due to additional increases on previously levied tariffs.
Dr. Kirida noted that the impact of these tariffs is expected to be profound, predicting that Thailand's exports could grow only by 1-2% this year, a significant drop from last year's growth of 5.4%. He stated, “We must assess our competitors and their tariff rates. If they face higher tariffs than Thailand, we may have opportunities to increase our exports, especially in sectors like electronics and automotive components.”
In terms of specific products, Dr. Kirida pointed to high-value exports such as transformers, jewelry, air conditioning units, and automotive parts that are likely to be affected. He emphasized that the U.S. tariffs would result in Thai exporters facing a combined tax burden of 38.5%, significantly higher than Mexico's 25% tariff rate.
As the global economy slows, Dr. Kirida expressed concerns about the overall economic stability of Thailand, predicting that rising logistics costs and tariffs will create a challenging environment for exporters. He stated, “We need to turn this crisis into an opportunity by finding ways to penetrate markets in China and Vietnam, where tariffs are higher than ours.”
To mitigate the adverse effects of these tariffs, Dr. Kirida suggested that Thailand should engage in negotiations with the U.S. to explore potential reductions in import duties. He outlined three key areas where the U.S. might seek concessions from Thailand: lowering tariffs on U.S. imports, increasing quotas for certain products like corn and coffee, and easing health standards for imports such as U.S. pork.
Meanwhile, the University of the Thai Chamber of Commerce has conducted a survey indicating that consumer spending during the upcoming Songkran festival is expected to boost the economy, with an estimated 134.63 billion baht circulating—an increase of 4.5% from last year. Despite concerns about a recent earthquake, the survey suggests that consumers remain optimistic about the festive season.
Dr. Thanawat Phonwichai, President of the University of the Thai Chamber of Commerce, remarked on the potential impact of reciprocal tariffs on Thailand's economy, noting that the 36% tariff could reduce Thailand's export value by approximately 359.1 billion baht, significantly affecting GDP growth. He noted that the direct impact from exports to the U.S. could result in a decline of 300.2 billion baht, while indirect effects could further decrease growth by 1-2%.
In light of these developments, investment analysts are closely monitoring the situation. Mr. Sumbat Narawuthichai, Secretary-General of the Investment Analysts Association (IAA), shared insights from a recent survey of 23 investment firms. The survey indicated a consensus among analysts that the Thai economy may grow less than 2% this year due to the compounded effects of tariffs and global economic conditions.
As for the stock market, analysts predict that earnings per share (EPS) for 2025 will average around 90.03 baht, down from earlier projections of 94.95 baht. The market is expected to fluctuate between 1,113 and 1,336 points, closing the year at approximately 1,322 points.
In response to the economic challenges, analysts recommend diversifying investments, particularly in sectors like retail, food and beverage, and technology, while advising caution in automotive and electronics sectors that may be adversely affected by import tariffs.
Overall, the current landscape presents both challenges and opportunities for Thailand. By strategically addressing tariff impacts and capitalizing on potential market shifts, the country can navigate these turbulent economic waters. Dr. Kirida concluded, “We need to collaborate across sectors to minimize risks and leverage opportunities that arise from these changes.”
