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Tariffs

Thailand Advised to Diversify Markets Amidst US Trade Tensions

Strategic Insights

— 2 min read

Thailand is expected to lose its strong export market in the US as a result of President Donald Trump's reciprocal tariff policy. Analyst Sompop Manarungsan, president of Panyapiwat Institute of Management, suggests that Thailand should move quickly to tap emerging markets created by China's extensive overseas investments. This new global supply chain, worth over $124 billion in the first half of 2025, has the potential to provide Thailand with a new source of export revenue. However, this requires Thai leaders to understand the direction of the new global supply chain and decide whether to view it as a competitor or a partner.

Key Takeaways:

  • Thailand's exports to the US could shrink by up to 36%, worth over $3 trillion, due to Trump's tariff policy, which would lead to a trade deficit of over $45.6 billion.
  • The US is likely to increase domestic production, making US-made goods competitors to imports, and potentially reshore production back to the US.
  • Thailand should diversify its markets and tap into emerging markets created by China's overseas investments, which could reach over $124 billion in the first half of 2025.
  • China's transition to a service-based economy could lead to a significant decline in production, making it an ideal time for Thailand to tap into the Chinese market.
  • Thailand's Commerce Ministry reported a surplus of $35.4 billion with the US in 2024, while the US Bureau of Economic Analysis reported a trade deficit of $45.6 billion.
  • Major Thai exports to the US include electrical and electronic equipment, auto parts, rubber and rubber products, household appliances, textiles and garments, as well as gems and jewellery.
  • Thailand's main imports from the US include machinery and industrial equipment, chemicals, agricultural products, and animal feed, as well as aircraft and parts.
  • Chemicals and agricultural products from the US are expected to increase due to imports, making them major competitors to Thai exports.

Statistics:

  • Thai exports to the US grew steadily from $16.6 billion in 2009 to $54.9 billion in 2024.
  • Thailand recorded a surplus of $35.4 billion with the US in 2024, while the US Bureau of Economic Analysis reported a trade deficit of $45.6 billion.
  • China's investment in countries along its Belt and Road Initiative reached $124 billion in the first half of 2025, surpassing the full-year figure of $122 billion in 2024.
  • The average tariff rate could cut US imports by as much as 36% under Trump's reciprocal tariff policy.
  • Trump pressured several countries to invest in the US, including Japan ($550 billion), South Korea ($350 billion), the EU ($600 billion), Nvidia ($500 billion), and Apple ($600 billion).

Sources:

  • Sompop Manarungsan, president of Panyapiwat Institute of Management
  • US Bureau of Economic Analysis
  • Thailand's Commerce Ministry
  • Panyapiwat Institute of Management
  • Bloomberg, Reuters

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