US tariffs set to dent foreign investment

Private consumption expected to decline

- NAREERAT WIRIYAPONG

Foreign direct investment (FDI), especially investment coming from China, is expected to be hard hit by America’s reciprocal tariff policy, says a unit of China Galaxy Securities (CGS), a state-owned brokerage, which noted that the steep US tariff would dent Thai GDP by about 1% this year.

The sectors that are likely to be hit hard once the 36% tariff becomes effective on July 8 include industrial estates, electronics, electrical appliances and auto parts, assuming the reciprocal tariff is not further postponed, said Kasem Prunratanamala, head of research at CGS International (CGSI).

CGSI believes that this would impact FDI applications, especially from China, which amounted to 175 billion baht (US$5 billion), forming 21% of total FDI in 2024, Mr Kasem said, citing figures from the Board of Investment (BoI).