Thai exports face pressure amid global trade war, says TNSC
Thai exports would be under pressure amidst an intensifying global trade war due to the country’s six weaknesses, the Thai National Shippers' Council (TNSC) said on Sunday.
Thailand is among exporting countries affected by the global trade war, which is expected to intensify further after US President Donald Trump announced to raise import tariffs by 25% on goods from Canada and Mexico, and 20% on Chinese goods.
Despite a 13.6% year-on-year expansion in Thai exports in January this year, the country faced a US$1.88 billion (75.74 billion baht) in trade deficit, showing that Thailand has issues in its economic structure.
“The Thai export sector is facing risks and volatility amidst Trump 2.0 trade war, which is like a time bomb waiting to explode,” said TNSC chairman Chaichan Charoensuk.
He outlined six weaknesses in the Thai economic system as follows:
- Low local content utilisation: Thailand would be at risk of a trade deficit due to the US import tariffs, resulting in an impact on Thai entrepreneurs.
- Influx of Chinese products: Chinese goods are expected to flood into ASEAN due to the US import tariffs, including Thailand. This could trigger an impact on competitiveness among Thai SMEs and a trade deficit with China.
- Difficulty in accessing loans: This difficulty causes entrepreneurs to lack liquidity and be unable to develop businesses to keep up with changes in the global economy.
- Outdated product manufacturing: The Thai industry still relies on original equipment manufacturers (OEMs) and lacks sufficient funding to support research and development, as well as the establishment of Thai brand identities.
- Lack of skilled labours: Thailand lacks skilled labour in technology and innovation, limiting foreign investment opportunities. Workers lack motivation to learn digital skills, hindering adaptation to digital transformation.
- Lack of “single policy”: Despite the government’s Thailand 4.0, Bio-Circular-Green economy model and Eastern Economic Corridor, Thai manufacturing does not have a clear guideline to drive the industry further.
These weaknesses slowed down Thai manufacturing and economy in the Trump 2.0 era, Chaichan said, adding that Thailand should tackle these issues to prevent risk in economic growth.
