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Exports

Thailand Tightens Export Controls Amid US-China Trade Tensions

Strategic Insights

— 2 min read

Thailand's Department of Foreign Trade (DFT) has begun intensifying reviews of exporters' business records to ensure compliance with a newly approved 19% tariff rate with the United States. This move comes in response to concerns about Chinese companies routing goods through Thailand to dodge US tariffs, as well as concerns about Chinese products flooding the Thai market and an increase in Chinese-owned businesses. The DFT is conducting checks on 65 goods groups spanning 224 tariff categories to prevent Chinese products from being mislabelled as Thai and entering the US under false claims.

Key Takeaways:

  • Thailand's DFT is reviewing exporters' business records to ensure compliance with the 19% tariff rate with the US, addressing concerns about Chinese companies bypassing US tariffs.
  • The DFT is inspecting factories, using X-ray checks at ports, and cross-checking company registrations to verify the origin of goods.
  • China's imports are affecting Thai manufacturers, with industries like steel, plastics, electronics, and textiles being hit the hardest, resulting in a 56% drop in factory output.
  • The Federation of Thai Industries (FTI) estimates that US tariffs combined with Chinese imports could cost local firms between 800 and 900 billion baht in lost income.
  • The number of Chinese nationals opening businesses in Thailand has increased, particularly in manufacturing and shipping, with a 97% spike in online sign-ups since October 2023.
  • The FTI has flagged cases where Chinese companies import goods to Thailand, claim Thai origin, and then export them to the US, putting Thailand's reputation as a reliable trade partner at risk.
  • The Ministry of Commerce now manages all origin certificates for US exports and works closely with US Customs on product checks and shared inspections.
  • Thailand's partnership with the US, built on decades of close trade and diplomacy, faces new strains due to trade tensions with the US and China.

Statistics:

  • Thai exports to the US have increased, with the US now representing 18% of all Thai exports, resulting in a trade surplus of $41.5 billion in the first eleven months of last year.
  • The number of Chinese nationals opening businesses in Thailand has increased, particularly in manufacturing and shipping, with a 97% spike in online sign-ups since October 2023.
  • The Federation of Thai Industries (FTI) estimates that US tariffs combined with Chinese imports could cost local firms between 800 and 900 billion baht in lost income.

Sources:

  • "Thailand Tightens Export Controls Amid US-China Trade Tensions" (author unknown), Thai Government Public Information
  • "Thai exporters feel the pinch as Chinese goods flood in" (author unknown), Bangkok Post
  • "Thailand's DFT to inspect factories, ports to prevent mislabelled goods" (author unknown), Nation Thailand
  • "Thai manufacturers hit hard by cheap Chinese imports" (author unknown), Bangkok Post
  • "FTI warns of lost income due to US tariffs and Chinese imports" (author unknown), Nation Thailand
  • "Number of Chinese nationals opening businesses in Thailand soars" (author unknown), Bangkok Post

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