Chinese goods expected to flood Thailand over next three years, highest in a decade

Ath Pisalvanich, an independent scholar and specialist in international and ASEAN economics, said that following the enforcement of the Trump Tariff, or Reciprocal Tariff, on August 7, 2025 (US time), the United States is now imposing duties ranging from 15% to 50% on imports from 90 countries.

Most countries face the lowest rate of 15%, while India and Brazil are hit with the maximum 50%. China is currently subject to a 30% tariff.

On August 11, President Donald Trump signed an Executive Order delaying further tariff increases on Chinese imports for 90 days, until November 10, leaving the current rate at 30%. In retaliation, China has imposed a 10% tariff on US goods.

According to data from the US International Trade Commission (USITC), before the Trump Tariff, Chinese goods exported to the US were taxed between 0% and 25%. The 25% tariff, introduced under Section 301 of the Trade Act of 1974, mainly affected electronics, machinery and furniture.

Ath explained that the Trump Tariff will make it more difficult for China to export to the US, forcing Chinese goods to be redirected to other markets such as ASEAN, the Middle East and Africa. 

Thailand is among the target markets, a phenomenon known as “trade diversion.” With Chinese production levels unchanged, the goods unable to enter the US will be exported elsewhere.

Over the past 19 years (2006–2024), China’s exports to the US rose from US$200 billion to US$500 billion, peaking in 2018 when its trade surplus reached US$400 billion.

Although the surplus fell to US$290 billion in 2024, Ath said the figure remains very high and a major challenge for Washington, given America’s reliance on Chinese goods. Roughly 70% of products sold in Walmart are sourced from China. If the US maintains a 30% tariff, China’s exports to America could decline by US$300 billion within the next three years.

Ath’s analysis shows that the US reduction in Chinese imports, valued at US$301.7 billion, will lead to greater trade diversion. In ASEAN, Vietnam and Malaysia will absorb the largest share, followed by Thailand, which could account for 2.4% of the goods diverted from the US market.

For Thailand, the study projects that:

• Without a 30% US tariff on Chinese imports, Thai imports from China would increase from US$83.47 billion to US$105.63 billion.
• With a 30% US tariff on Chinese imports, Thai imports from China would rise from US$2.05 billion to US$2.60 billion.
• In total, Thai imports from China would climb from US$85.52 billion to US$108.23 billion, widening Thailand’s trade deficit with China from US$46.66 billion to US$63.63 billion.

“The 30% tariff the United States has imposed on Chinese goods will divert Chinese exports worth between 69.78 billion and 88.30 billion baht into Thailand,” said Ath.

He explained that most of the redirected goods, once destined for the US market, would be industrial products such as telecommunications equipment, network devices, automobiles (both finished cars and parts), and computers with related hardware.

Ath warned that in the next three years, Thailand could face the highest influx of Chinese goods in a decade, driven both by Beijing’s trade policies and by the Trump Tariff. As a result, Thailand’s trade deficit with China is set to reach unprecedented levels.

Chinese exports to Thailand under Beijing’s policies include both agricultural and industrial goods. However, the US tariff will significantly accelerate the arrival of Chinese industrial products in particular.

The scale of this inflow will depend on the outcome of ongoing US-China trade negotiations, scheduled to conclude on November 10, 2025. If tariffs exceed 30%, Thailand can expect an even greater surge of Chinese imports than currently forecast.

Ath stressed that the Thai government must urgently implement safeguards. These include:

• Establishing an early-warning system to monitor surges in Chinese imports.
• Enforcing transparent rules of origin and cooperating with US authorities on traceability for goods at risk of being classified as transshipments, which could attract 40% tariffs in the US.
• Tightening import standards and quality controls on Chinese goods to help protect Thai SMEs.
• Setting up an industrial adjustment fund to support SMEs in competing with the influx of Chinese products.

NESDC warns US tariffs will dampen demand for Thai exports

Danucha Pichayanan, Secretary-General of the National Economic and Social Development Council (NESDC), voiced concern over the impact of the United States’ reciprocal tariffs, warning they will weigh on Thailand’s economy.

He noted that Washington’s imposition of a 19% tariff on Thai goods, effective since August 7, 2025, together with a targeted 25% tariff on automobiles and auto parts, would affect the country through several key channels.

Risks to Thai exports

Danucha said Thailand’s exports to the US, particularly in the second half of 2025, face heightened risks as American demand is expected to slow following a frontloaded surge in imports earlier this year.

The decline in demand for intermediate goods and raw materials from countries facing US trade barriers, particularly China, poses further risks to Thailand, according to economic analysts. Chinese exports of key inputs such as auto parts, computer components, rubber products, plastic pellets and chemicals are expected to fall in line with weaker global demand.

At the same time, Thailand may face a surge in imports, especially goods linked to trans-shipment—items rerouted to bypass US tariffs, or products falsely declared as originating elsewhere. Such shipments could expose Thailand to punitive US tariffs of up to 40%. Imports directly from the United States also fall into this high-risk category.

Beyond these direct trade impacts, wider concerns stem from global economic volatility. Uncertainty remains over the trajectory of US tariff measures on key trading partners, highlighted by the 90-day extension of negotiations with China until November 10, 2025.

Further risks lie in potential hikes in product-specific tariffs and tighter international trade controls on strategic inputs such as semiconductors, steel, aluminium and rare earth minerals. 

Analysts warn these measures could significantly slow global growth in the second half of the year and may even trigger severe supply chain disruptions if tensions escalate.

US postpones local content talks with Thailand

Deputy Prime Minister and Finance Minister Pichai Chunhavajira said negotiations with the United States on local content requirements for Thai-origin goods have been postponed to next week, instead of the original schedule this Friday. He noted that Washington is currently holding similar discussions with several countries.

When asked whether Thailand would insist on setting the local content threshold at 40%, Pichai said it was too early to comment, as the US side would first present its position. Thai policymakers would then decide how to proceed.

“On tariffs, we have asked for the same treatment as other countries. Ultimately, it is US consumers who are bearing the impact, as imported goods are becoming more expensive. The US wants to bring all production back home, but that is not possible in every case. We understand this, but there is little we can say,” Pichai said.