Thailand's Export Growth Faces Sharp Slowdown as Trump Tariffs Take Effect
Commerce Ministry warns August exports may stall after 13-month growth streak as new US tariffs hit and baht strength compounds challenges
- Thailand's 13-month export growth streak is expected to face a sharp deceleration following the implementation of a 19% U.S. tariff rate in August.
- Recent strong export figures are considered artificial, having been inflated by global importers stockpiling goods before the tariffs took full effect.
- The negative impact of the U.
Thailand's Commerce Ministry is closely monitoring the export sector after warning that the country's impressive 13-month growth streak could come to an abrupt halt as US tariffs begin to take effect and the strengthening baht compounds exporters' challenges.
Despite exports surging 11% in July to reach $28.58 billion, marking the thirteenth consecutive month of growth, officials are bracing for a sharp deceleration in the coming months as the reality of President Trump's trade policies begins to bite.
The recent export boom has been largely driven by global importers rushing to bring in goods before Trump's tariffs took full effect, creating an artificial surge in demand that officials say is unsustainable.
Poonpong Naiyanapakorn, director of the Office of Trade Policy and Strategy, said the 19% US tariff rate that came into force in August is expected to slow Thailand's export momentum significantly.
The country successfully negotiated the tariff down from an initially threatened 36%, bringing it closer to rates faced by regional competitors.
"Export growth in August, when the 19% US tariff rate takes effect, is likely to slow down but remain positive," Poonpong said. However, he warned that the remaining five months of the year would be critical in determining whether Thailand meets its annual growth target of 2-3%.
The ministry is considering revising its full-year export targets after seven-month growth of 14.4% raised hopes of stronger performance.
Officials will meet with key business groups—including the Thai Chamber of Commerce, the Federation of Thai Industries, and the Thai National Shippers' Council—to reassess projections once August figures are available.
Thailand's export success has been broad-based, with agricultural and industrial products both contributing to growth.
Agricultural exports jumped 21.5% in July, driven by strong demand for fresh and processed fruits, poultry products, pet food, and wheat-based products.
Industrial exports rose 14% for the month, with computers and components, rubber products, machinery, electrical circuit boards, and plastic products leading the charge. Over the first seven months of 2025, industrial exports surged 18%.
The country maintained trade surpluses with key partners, including a $4.55 billion surplus with the US in July alone. However, Thailand continues to run a significant deficit with China, importing $9.65 billion worth of goods while exporting just $3.63 billion in July.
Thanakorn Kasetsuwan, president of the Thai National Shippers' Council, painted a more pessimistic picture for the months ahead.
He warned that third-quarter exports could stagnate completely, with growth potentially hitting 0% as the full impact of Trump's tariffs becomes apparent.
"From discussions with various industrial groups, we're seeing similar assessments that third-quarter export figures may turn negative or hit 0%," Thanakorn said. "Beyond Trump's policies, the strengthening baht is also undermining Thai exports."
The baht's appreciation against major currencies is making Thai goods more expensive for international buyers, compounding the challenges posed by US tariffs.
Beyond US trade policy, Thailand faces several other export challenges.
The suspension of cross-border trade with Cambodia due to ongoing conflicts has disrupted traditional routes, while accumulated inventory levels in importing countries—built up in anticipation of tariff increases—may reduce future orders.
China's economic slowdown also poses risks, as reduced demand from Thailand's second-largest trading partner could further dampen export prospects.
The Commerce Ministry has pledged to monitor the situation closely and develop appropriate response measures whilst continuing efforts to open new markets and diversify Thailand's export destinations.
Despite the challenges ahead, the strong first-half performance has provided some buffer. Thailand's seven-month export value of $195.43 billion, representing 14.4% growth, has exceeded expectations and demonstrated the resilience of the country's export sector.
However, with global trade tensions showing no signs of easing and domestic currency pressures mounting, Thai exporters are preparing for a more challenging period ahead as the temporary boost from pre-tariff stockpiling fades away.
