FRIDAY, March 29, 2024
nationthailand

Trade war to sap Thai growth 

Trade war to sap Thai growth 

THE US-China trade war is expected to shrink Thai export growth by 0.5-1.9 per cent next year, while Thai SMEs should prepare to cope with the likely influx of Chinese products into Asean, including Thailand, according to the University of the Thai Chamber of Commerce (UTCC).

  
Aat Pisanwanich, director of UTCC's Centre for International Trade Studies, said the trade spat is expected to lower global gross domestic product (GDP) by 0.1-0.5 per cent with China suffering the heaviest loss , followed by the United States, the European Union, Japan and South Korea.
Thailand is projected to account for 0.2 per cent of the world's estimated loss from the trade sanctions and the value of Thai export is expected to decline by US$1.18-$4.43 billion or a drop of 0.5-1.9 per |cent.
The US-China trade war, which started on January 22, 2017, was triggered by the the US trade deficit with China and accusations of China’s violation of intellectual property rights.
The US trade deficit with China widened from US$35.95 billion in January 2018 to $43.10 billion in October with its exports to China falling from $9.83 billion to $9.13 billion. Meanwhile, US shipments to China increased from $38.26 billion to $52.23 billion.
Based on the centre's study on the trade war, Thailand's export has not been adversely affected. Thai export edged up from $20.46 billion in January to $21.41 billion in October this year, 
Thai shipments to the US also rose from $2.19 billion in January to $2.44 billion in October, led by chemicals, plastic products and textiles. However, Thai shipments of ready-to-eat food, furniture, leather and leather products, and processed fruits to the US declined.
Meanwhile, Thai shipments to China climbed from $2.44 billion in January to $2.63 billion in October, led by processed fruits, chemical and plastic products. However, Thai exports of medical equipment, rubber, wood and automobiles and parts to China posted a decrease.

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Amid the US-China trade spat, total Thai export fell by $351-$597 million or 0.1-0.2 per cent this year.
Based on the study, China and the US are expected to export more to Thailand while Thai shipments to China and the US will also rise, Anat said .
Given the expected drop in trade between US and China and lower Thai exports due to the country being a part of the Chinese |supply chains, Thai export is expected to expand in a range of 6.1-7.5 per cent to $271.41-$274.99 billion next year.
As a result of the trade war, China is expected to export 1-4.4 per cent more to the Asean market .
Aat said that Thai SMEs should take cautions and be prepared to cope with the likely influx of Chinese products into Thailand, adding that Asean countries may have to trade more with each other.
However, foreign direct investment (FDI) is expected to flow into Thailand, particularly the Eastern Economic Corridor (EEC), he said. It will also present an opportunity for technology transfers. 
Montri Socatiyanurak, a professor at National Institute of Development Adminstration, said impact from the ongoing US-China trade war on Thailand have affected the country’s supply chains as Thailand produces upstream products and exports them to China. Such products extend from computer, electronics and rubber-made furniture parts.
Indirectly, Thailand is expected to see lower purchasing power in China and the US and there could be impact on products which are not yet included in the list for higher tariffs , he said.
However, if the US-China trade war is prolonged, both may relocate their manufacturing bases to other countries, including Thailand and Vietnam, he said.
China has a free trade agreement with Asean and if Thailand accelerates investment in infrastructure, it will be easier for foreign companies to invest in the country, he said.
 

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