Thailand may struggle to meet its economic growth target next year if US President-elect Donald Trump implements his proposed tariff increases, according to a study. Such a move could negatively impact the country’s exports and weaken the baht, resulting in an estimated loss of about 160 billion baht ($4.6 billion) and a reduction of nearly 0.9 percentage points from the projected 3% growth rate for gross domestic product in 2025, as stated by Thanavath Phonvichai, president of the University of the Thai Chamber of Commerce, during a briefing in Bangkok on Wednesday.
“This is a significant and unavoidable blow to our economy,” Mr. Thanavath remarked, referencing the university’s analysis of Trump’s previously announced tariff intentions. “Our goal of achieving 3% growth next year is at risk.”
In anticipation of potential trade tensions during Trump’s presidency, Thai authorities are preparing to support the economy with strategies such as cash handouts and debt relief measures to maintain a slow recovery in growth.
During Trump’s first term, Thailand benefited from the US-China trade war, as many companies relocated their operations from China to avoid tariffs and trade restrictions.
The projected downturn for Thailand’s economy may result from decreased exports to the US, its largest trading partner, alongside indirect effects from disrupted supply chains. Mr. Thanavath indicated that Trump’s policies could also contribute to a weaker local currency and decreased US investment in Thailand.
Thai exports of electrical equipment and electronics are expected to be the most severely impacted, as nearly 20% of the country’s total exports are directed to the US market. Other critical sectors facing challenges from a potential trade conflict include machinery, processed foods, automobiles and parts, steel, and rubber.
On the positive side, Thailand may gain from heightened US-China tensions by seizing opportunities to replace Chinese products in certain industries, such as machinery, electrical appliances, and rubber, according to the university’s report.
