Both crisis and opportunity in latest round of US-China trade war
The United States’ recently erected tariff wall against China might have a short-term effect on the global economy, but will impact Thai manufacturers who are part of the Chinese supply chain, the Thai National Shippers’ Council (TNSC) said on Wednesday.
Most likely to feel the impact are Thai manufacturers of electronics and automotive components for Chinese markets, TNSC chairman Chaicharn Charoensuk noted.
The White House announced on Tuesday that the US is hiking tariffs on US$18 billion (660 billion baht) worth of imports from China, targeting strategic sectors like electric vehicles, batteries, steel and critical minerals.
The decision reportedly came as President Joe Biden gears up for a re-run of his 2020 contest with Republican rival Donald Trump in November's election, with officials criticising Trump's record on trade as they made the announcement.
China is also under investigation by the European Union into whether its EVs are overly subsidised to obstruct fair competition in European markets. The result of the investigation is due on June 5 and could lead to the EU using tax measures to counter such subsidies, Chaicharn added.
The TNSC chairman pointed out that the US-China trade feud over the past decade has generally benefited Thai entrepreneurs, who have exported more products to the US as it seeks alternative suppliers.
“Exports to US in the past 10 years grew 112%, especially in automotive components, electronics, electrical appliances, and rubber products,” he said. “However, with a new round of the trade war, Thai manufacturers should not rest easy, especially those who are part of China’s supply chain.”
Chaicharn suggested that Thai entrepreneurs use this opportunity to attract investors and multinational corporations to move their production base to Thailand, especially in key industries such as automotive parts, tyres, and electronics components.
“We need to establish a comprehensive logistics and infrastructure system, as well as training and research and development centres to help increase the skills of Thai workers and the value of Thai products,” he added.
Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI), said the new round of US-China trade war could be viewed as both crisis and opportunity.
He said the trade war could impact several industries including manufacturing, semiconductors, or even mobile phone applications, and might eventually force trade partners to choose sides.
“Thailand is lucky to be friends with both sides and we able to maintain our neutrality,” he said. “We need to set a clear target and adjust our industrial structure to be in line with global trends, which are moving towards environmentally-friendly industries.”
