Thailand is positioned to benefit from two significant investment opportunities in data centers and electronics automation due to US President Donald Trump’s extensive global tariffs, according to Suphachai Chearavanont, Chief Executive of Charoen Pokphand (CP).
“This surprisingly positive development amidst global turmoil suggests we could experience an influx of investments in data centers and electronic automation, as Thailand is viewed as a secure investment location in Southeast Asia,” he stated, highlighting the region’s market of nearly 700 million people.
However, Mr. Suphachai noted that these potential gains may not materialize during Prime Minister Paetongtarn Shinawatra’s administration. He expressed concern that Trump’s proposed 36% tariff rate on Thai imports could significantly impact exports, especially with the US being Thailand’s second-largest trading partner, and the nation having recorded a trade surplus of $45 billion last year.
The sectors likely to face the most significant challenges include agriculture, automotive and auto parts, machinery and equipment, as well as electrical appliances and electronics.
Mr. Suphachai pointed out that governments around the world are rapidly responding to these new tariff rates, with some considering relocating manufacturing operations from China to more favorable locations, such as Southeast Asia. He noted that strict regulatory conditions have complicated foreign investment in China’s data center market. Furthermore, he mentioned that Chinese companies are hesitant to invest in Vietnam and the Philippines due to historical distrust and conflict.
“Investment in data centers is likely to continue flowing into Thailand and Malaysia,” he added.
In terms of electronics automation and electric vehicles, Mr. Suphachai indicated that both Thailand and Vietnam stand to gain from the China+1 strategy, where Chinese firms diversify their operations into other promising economies like India, Thailand, and Vietnam. He noted that Chinese firms tend to prefer investing in Thailand, whereas Indonesia is attracting foreign investors due to its large population.
He emphasized that the Board of Investment (BoI) must play a crucial role by offering tax incentives, subsidies, and other benefits to draw in foreign investments, thus fostering a competitive manufacturing environment in Thailand. He also suggested that the government should promote a greater use of clean energy among data center operators, as these facilities require substantial electricity for data processing.
“To attract top global talent, we need to develop Thailand’s capacity to nurture advanced digital expertise and skilled workers who can train the local workforce,” Mr. Suphachai argued. “If we fail to enhance our capabilities, we might only benefit from the energy bills associated with data center investments.”
Lastly, he expressed skepticism regarding the BoI’s proposal to permit majority or even full foreign ownership of companies in Thailand, advocating for a limit of 70% foreign ownership instead. He acknowledged that Trump’s tariff decisions have instilled economic anxiety and uncertainty among Thai businesses and consumers, considering that these tariffs will eventually affect end consumers.
“Thai businesses hope that our government can effectively negotiate with the Trump administration to alleviate any negative impacts from these tariffs,” he concluded.
