'We really need to talk'

The business sector wants the government to use the 90-day pause on reciprocal tariffs to commence negotiations with the US, write Nareerat Wiriyapong, Phusadee Arunmas and Molpasorn Shoowong

- Nareerat Wiriyapong, Phusadee Arunmas and Molpasorn Shoowong

With trade tensions exacerbated by the US’s returned tariffs, key business sectors are calling on the Thai government to prioritise negotiations with Washington during the 90-day pause, as the nation is expected to bear one of the hardest hits from the tariffs rate 3.6%, which is significantly higher than the regional and global average.

With exports at risk, analysts and business sectors also warn of far-reaching economic impacts, compounded by China’s slowdown and cooling investor sentiment, particularly regarding vulnerable sectors such as tourism.

BROAD-BASED IMPACTS

Chak Benjasirimongkol, managing director and head of research at Maybank Securities (Thailand), said several of Thailand’s industrial sectors could face significant headwinds due to US President Donald Trump’s tariffs.

Sectors that could suffer from a potential export slowdown or higher competition from imports include electronics, automotive and petrochemicals, according to the brokerage.

Meanwhile, the banking, finance and commerce sectors could decline if economic growth dips.

Moreover, the tariffs announced could make China +1 trade either permanently or temporarily irrelevant, negatively affecting industrial estates, said Mr Chak.

“With the US tariffs being imposed across the board, we see a risk that other countries, particularly China, will dump their products on the Thai market. This could lead to Thailand increasingly relying on exports, weakening a manufacturing sector that has already experienced a significant downturn before the tariff announcement,” he said.

Thailand’s imports from China have increased significantly since 2018 when Trump first imposed tariffs on Chinese goods. While some of these goods could have been to serve local demand, Maybank believes a significant portion were bound for re-export to the US.