Potential Risks and Opportunities for Thailand in Light of the Upcoming US Presidential Election
Experts in the business and academic sectors anticipate that the outcome of the upcoming US presidential election, featuring Democratic candidate Kamala Harris and Republican candidate Donald Trump, may present both risks and opportunities for Thailand.
Sanan Angubolkul, chairman of the Thai Chamber of Commerce, indicated that shifts in US trade policies, investment patterns, and environmental commitments could significantly influence the Thai economy, which is closely intertwined with global politics.
He pointed out that the Thai baht and stock market often experience fluctuations during US elections due to investor concerns over how American policies might impact global markets. In this context, he urged both the Thai government and businesses to adapt strategically to mitigate potential risks from US policies while seizing opportunities, such as strengthening regional ties in Southeast Asia and promoting domestic industries.
The Thai Chamber of Commerce has identified two potential scenarios:
- If Trump Wins: Trump’s policies could adversely affect the energy and shipping sectors, leading to increased inflation and impacting Thai exports. Implementing a 10% global import tariff by the US could also decrease demand for Thai goods. Additionally, tariffs of up to 60% on Chinese products might lead to a surge of cheaper Chinese goods flooding Southeast Asian markets, posing challenges for Thai manufacturers.
- If Harris Wins: A Harris administration is likely to continue the Biden-era policies, which generally support international trade and clean energy investments. This continuity could enhance Thai exports to the US and create opportunities for Thai businesses in clean energy and infrastructure sectors.
Despite these uncertainties, Mr. Sanan emphasized the importance of maintaining robust Thai-US relations. He expressed confidence that Thailand could navigate the changing landscape to ensure the US remains a vital trading partner and ally.
Investment Outlook
The Federation of Thai Industries (FTI), represented by Chairman Kriengkrai Thiennukul, expressed that Thailand may face repercussions from US trade barriers yet also stand to gain from increased foreign direct investment if trade wars escalate. He noted that should Trump be reelected, significant tariffs could be imposed on various products exported to the US, with Thailand having reported a trade surplus of approximately US$20 billion in 2020.
During Trump’s previous administration, a trade war with China escalated, with high tariffs imposed in response to longstanding trade deficits. Kriengkrai highlighted that Trump has indicated a desire to implement a “universal” tariff strategy on most imports to counteract higher tariffs from other nations.
If Harris succeeds Biden, some existing US trade barriers may continue but likely with less intensity than under Trump. Kriengkrai noted that while trade wars might challenge Thai exports, they could also drive increased foreign investment into Thailand.
Geopolitical Implications
Assistant Professor Akekalak Chaipumee from Kasetsart University remarked that regardless of the election outcome, the US will continue to assert its power in the Indo-Pacific region, maintaining a competitive stance against China and Russia. Both candidates prioritize an “America First” approach but differ in their international strategies. If Trump wins, the emphasis on unilateralism may increase, contrasting with Harris’s focus on diplomacy and multilateral cooperation.
Anekchai Rueangrattanakorn, a Political Science lecturer at Silpakorn University, noted that the election results may compel Thailand to navigate its foreign policy to avoid constraints in engaging with countries at odds with the US. He emphasized that Thailand should maintain its neutral stance, prioritize national interests, and actively promote peace and prosperity in Southeast Asia.
Strengthening Relations with the US
Panitan Wattanayagorn, a security and international relations academic, stressed the necessity of strengthening ties with the US regardless of who becomes president. He advised proactive engagement with both candidates, noting that early diplomatic efforts may yield long-term benefits for Thailand. He speculated that Trump’s leadership could lead to clearer strategies regarding conflicts like the Russia-Ukraine situation, while Harris might emphasize addressing Myanmar’s internal issues with Thailand’s assistance.
In summary, Thailand faces a complex array of potential risks and opportunities in light of the upcoming US presidential election. Strengthening diplomatic relations and adapting to the evolving geopolitical landscape will be crucial for Thailand’s continued economic growth and stability.
