Thai–Cambodian clashes slash border trade 99.5%, FTI warns US tariff stance could deepen crisis

• The Federation of Thai Industries (FTI) has warned that fierce clashes along the Thai–Cambodian border are inflicting severe damage on the border economy, with trade flows collapsing by 99.5% – a hit equivalent to closing the checkpoints and losing around 500 million baht a day.
• The renewed fighting, which flared on December 7, 2025 from the Phu Pa Lek–Phlan Hin Paet Kon area in Si Sa Ket and spread to Chong An Ma and Chong Bok in Ubon Ratchathani, has forced the Thai government to evacuate tens of thousands of residents from four border provinces to safety.
• The latest violence has further undermined an October 2025 ceasefire and added pressure on trade negotiations with the United States. Washington, through the Office of the US Trade Representative (USTR), has now sent an official letter asking Thailand to “halt the negotiation process”, a move seen as a sign that the US is still linking tariff talks to the handling of the border conflict.
• The Thai government has insisted that tariff negotiations should be separated from security issues, and has pledged to continue discussions, arguing that trade policy should not be held hostage to tensions with Cambodia.
   

Kriengkrai Thiennukul, chairman of the FTI, said the revived conflict not only threatens people’s safety but also hits the border economy and daily life “very hard”.

He accused Cambodia of repeatedly provoking incidents, particularly through serious breaches of the Ottawa Convention by laying landmines inside Thai territory. These ongoing provocations, including booby traps, have caused deaths and injuries among Thai soldiers, he said.

According to Kriengkrai, the Foreign Ministry recently presented clear evidence to an international meeting – including data from a mobile phone seized from a Cambodian soldier in earlier fighting – apparently showing Cambodian troops staging and recording bomb-planting demonstrations. He said Cambodian delegates at the meeting were visibly shocked and tried to block the presentation.

“Just a few days after this evidence was shown, Cambodia used various weapons to fire at Thai bases, injuring Thai soldiers and leading to small-arms clashes,” he noted, adding that the fighting escalated on December 7 with the use of more destructive anti-tank and heavy weapons.

In response, the Royal Thai Air Force deployed F-16 fighter jets to bomb what was described as a strategic target used as a base for hostile forces and the installation of heavy weapons threatening Thailand.

Kriengkrai said the conflict has directly affected an issue the US previously tied to progress on resolving the border dispute. USTR’s latest letter asking Thailand to pause talks confirms, he argued, that Washington is still treating the conflict as a condition for moving forward. Negotiations are therefore frozen at their earlier status.

“Thailand must continue to explain and clarify the situation to the US, reaffirming the strength of the evidence we have. For now we need to wait and see the US stance on tariff negotiations,” he said.

On the ground, the most visible impact has been the mass evacuation of hundreds of thousands of Thai residents from border districts in several provinces. This has almost completely halted economic activity along the frontier.

Border trade with Cambodia has plunged to just 0.5% of normal levels, meaning 99.5% of trade has effectively disappeared. Customs Department data show the situation is similar to an almost total checkpoint closure, which typically causes losses of about 500 million baht per day.

“Evacuations have disrupted livelihoods and jobs. Many sectors have stopped, from agriculture – rice farming and plantations – to factories and schools, which have closed for safety,” Kriengkrai said.

“Trade in the three to four most affected provinces has clearly been hit. It is still too early to calculate the full additional damage, but we hope Thailand can resolve this quickly so the situation does not drag on. The longer it lasts, the more it will erode the morale of people forced to leave their homes,” he added.