Thailand braces for ‘temporary' investment freeze as US tariffs remain uncertain
[BANGKOK] Thailand may see a slowdown in new foreign direct investments due to global trade uncertainties, while the South-east Asian country seeks to negotiate with Washington to soften the blow from the threat of a 36 per cent tariff.
New foreign investment applications could be frozen temporarily, at least while the tariff situation remains unclear during US President Donald Trump's 90-day pause on higher tariffs, according to Narit Therdsteerasukdi, secretary-general of the Board of Investment. Some companies that have already pledged investments in Thailand may also wait out the uncertainties before going ahead, he said.
'The slowdown could probably happen temporarily in the short term,' Narit told reporters late on Wednesday (May 7). 'Some investment projects that export mainly to the US, they may wait and see. It's a normal situation under uncertainties.'
Such a scenario may be a damper to Thailand's investment boom over recent months, with applications soaring to a 10-year high of 1.14 trillion baht (S$45 billion) in 2024. Applications nearly doubled to 431 billion baht in the first quarter of 2025 compared to a year earlier, boosted by foreign pledges in digital infrastructure and data centres, the Board of Investment reported last week.
Still, Narit said he was not too concerned as Thailand has 'good momentum' and investment pledges this year are expected to ultimately top last year's. Most companies believe in Thailand's long-term potential to play a bigger role in the global supply chain, and many foreign companies whose businesses focus on the domestic Thai market or export to countries other than the US will have 'no reason to stop' their investments in the South-east Asian country, he said.
The Thai government is still seeking to lock down talks with US authorities, after it said an initial appointment slated for late April was deferred pending a thorough review of some key issues. Thailand has since pledged to liaise with the US Customs and Border Protection to set new guidelines and monitor any false claims of origin by firms exporting goods out of the country.
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Bangkok has also indicated a willingness to reduce a US$46 billion trade gap with the US, its largest export market last year, by importing more American natural gas and farm commodities including corn and soybean meal. It's also encouraging Thai firms to invest more in the US to help ward off Trump's planned tariffs.
A delegation consisting of big Thai corporations and business groups will attend the annual Select USA Investment Summit in Maryland next week, Narit said.
Narit himself had just returned from a roadshow in Seattle and Washington DC, where he met with US technology companies and industry groups. Thailand is still seen as a strategic hub for supply chain diversification and the companies remain confident and interested in investing in the country, he said.
'The Thai government is now working hard to prepare the position and proposal for the discussion with the US administration. And I hope that the result will be favourable for the investors,' Narit said. 'We don't need to rush or to go first. We are waiting for the right timing.' BLOOMBERG
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