Tourism confidence dives
The TCT also predicted that Thailand would gain only 33.3 million foreign arrivals this year, which is even fewer visitors than last year, and secure 1.75 trillion baht revenue.
TCT president Chai Arunanondchai said the tourism industry has been facing even greater challenges than last year due to a string of negative factors.
According to the TCT, the tourism confidence index for the second quarter stood at only 70, below a benchmark of 100 recorded prior to the pandemic.
It also plunged from 79 recorded in the corresponding period last year, and 83 recorded in the first quarter.
The council surveyed 740 tourism operators nationwide from May 25 to June 10. The kidnapping of a Chinese actor into a border scam centre in Myanmar and the March 28 earthquake hampered foreign tourist arrivals, causing the Chinese-speaking market to drop by over 50%.
World economic growth is expected to grow at the slowest rate in 16 years, mainly attributed to the US's reciprocal tariff policy, causing tourists to feel insecure about their income, prompting them to opt for trips to closer destinations instead.
The emerging challenges include the ongoing Thailand-Cambodia border spat, which is expected to hamper tourism in the border provinces during this low season, while the high level of household debt among Thais also persists.
The tourism confidence index across all six regions also dipped year-on-year. The Eastern and Western regions still recorded a better index than others at 78 and 73, respectively, as they are able to share tourists travelling there from Bangkok.
In terms of business sectors, the confidence index for entertainment businesses dropped to the lowest level of only 60, down from 73 last year.
In the second quarter, tourism operators reported having only a 45% recovery in terms of revenue compared to the level recorded in 2019.
Hotels also recorded a 48% average occupancy rate, dipping from 55% recorded in the corresponding period last year.
Even though the labour shortage is not a critical issue for the tourism industry at the moment, it would be a problem if more businesses decide to permanently close down, he said.
In the second quarter, 94% of businesses were still operating as usual, down from 97% in the first quarter.
The TCT forecasts that the confidence index will dip further to 65 in the third quarter.
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Bangkok Post
15 hours ago
- Bangkok Post
China toughens import rules on Vietnamese durians after detecting health risk
Chinese authorities have tightened oversight of imported Vietnamese durians this year after finding "excessive levels" of two potentially harmful substances in the popular, high-value fruit. The General Administration of Customs of China now requires enhanced pre-export safety checks and compliance testing before shipments leave the source country, with "qualified" test reports to be attached to durians, a customs official told the South China Morning Post, requesting anonymity due to internal rules. She said the administration had intensified testing for the organic compound alkaline yellow and the metal cadmium in Vietnamese durians, after discovering concentrations that "seriously endangered the health of domestic consumers" at the start of 2025. "In order to effectively prevent food safety risks, the General Administration of Customs immediately took action." Under the stricter rules, Vietnamese durians are subject to "batch by batch" testing - with any unqualified fruits returned or destroyed. Exporters are in turn suspended from shipping the fruit to China, she said. Fresh durian shipments from Vietnam fell by about 45% year-on-year from January to June in value terms, customs data showed. Vietnam's shipments totalled US$611.5 million over the first half of 2025. The pungent spiky fruit fetches large sums in China - the world's biggest importer of the delicacy - where a 6 kilogramme specimen sells for as much as 200 yuan (900 baht). Durians are especially popular with middle-class families as well as dessert makers and givers of gifts for occasions such as weddings. Vietnam has vied with Thailand, China's historic top source of imported fresh durians, for a slice of the market since mid-2022. China also allows Cambodia, Malaysia and the Philippines to ship fresh durians. Vietnamese media outlets had noted a rise in rejected durian shipments earlier in the year. Analysts believe some growers in the Southeast Asian country lack nearby fruit testing facilities and may still be getting used to complying with Chinese rules. China's "tightened" customs inspections are "slowing down distribution and affecting turnover" of durians from Vietnam among other places, said Lim Chin Khee, an adviser to the Durian Academy, a Malaysian institution that trains local growers.
Bangkok Post
19 hours ago
- Bangkok Post
Tallying the tariff trade-offs
The 19% US reciprocal tariff on Thai goods could offer some much-needed relief for businesses in Thailand, as this rate aligns with the regional average. However, several Southeast Asian nations including Thailand had to offer concessions, including opening up their markets to American products, often without a tariff. This change is expected to significantly reshape the trade landscape. How will these developments affect Thailand's local market and its export dynamics? RELOCATION POSSIBLE Nuttaporn Triratanasirikul, deputy managing director of Kasikorn Research Center (K-Research), said Thai exports likely to lose overseas market share because of US tariffs include jewellery, rubber gloves, pet food and home appliances. "Rubber gloves, in particular, will face stiffer competition from those shipped from Malaysia, while Thai-made pet food also has some outstanding rivals from other countries. These products are at risk of losing their overseas markets," she told the Bangkok Post. Locally produced pet food could become less competitive when Thailand lowers import duties on US products, along with internal combustion piston engines and medical instruments, according to K-Research. Internal combustion engines and medical instruments are among the top 10 products Thailand imports from the US, with auto parts heading the list. Other major import items are soybeans, pet food, food supplements, and machinery parts. "However, we are unlikely to see an influx of US products, which are positioned differently from the cheap Chinese goods that normally flood into Thailand. US-made goods are mostly intermediate high-tech goods that are not produced here in Thailand," said Ms Nuttaporn. If manufacturers in Thailand find it difficult to compete at home or abroad, they might freeze investments, she said. "Costs may rise for these manufacturers, making them less competitive and less likely to invest in capacity expansion," said Ms Nuttaporn. Looking to next year, if the US tariffs stay in place for long and the government does not address this issue properly, affected manufacturers could "possibly relocate their production" to countries where costs are lower, she said. Chanintr Chalisarapong, vice-chairman of the Thai Chamber of Commerce, said opening up the local market to US imports is an opportunity for change and reform. Regulations in several sectors, particularly agriculture, are outdated and these have "hampered Thailand's competitiveness", he said. Thailand has made progress in negotiations for a free trade agreement with the European Union, which Thai negotiators expect to conclude by the second quarter of next year. Officials hope a deal can help to offset the impact of US tariffs with greater market access to 27 European countries. "Thai exporters have to find new markets to help ease the impact of higher US tariffs. The Middle East, Eurasia and Latin America offer strong growth opportunities for Thai exporters, especially for pet food," said Mr Chanintr. UNPREPARED The Federation of Thai Industries (FTI) cautioned about the trade-off for opening up Thai sectors unprepared to face tougher competition in exchange for a reduced US tariff. Agricultural products such as meat and animal feed as well as certain industries are likely to bear the brunt if they are not protected against the import of rival products from the US, said Kriengkrai Thiennukul, chairman of the FTI. Herbal products and medicines should not be seriously affected if local manufacturers compete with American companies, but local petrochemical and chemical industries are not ready for a zero-tariff policy," said Mr Kriengkrai. Entrepreneurs in these industries need more time to adjust because they depend on imported raw materials, making it difficult for them to control production costs, he said. Agriculture is another sector vulnerable to zero duties on US imports, as Thai farmers will struggle to avoid a severe impact, said Mr Kriengkrai. "This will not be good for household income and economic growth in the long term," he said. SMEs IN TROUBLE A US reciprocal tariff of 19% is expected to significantly undermine the competitiveness of Thai small and medium-sized enterprises (SMEs), said Sompop Manarungsan, an analyst on the Chinese and US economies. Many food products in US grocery stores are produced by Thai SMEs, he said. "The question is whether SMEs even have a margin of 19% to cover the tariff. In order to survive, Thai SMEs must have at least a 30% margin, but how many do? Most of them operate on single-digit margins, especially in the food sector," said Mr Sompop. "Both large and small food businesses will struggle with a 19% tariff. We must find new sources of demand outside the US, such as domestic demand. We must also develop the service sector to drive growth, and use it to lead the manufacturing sector. For example, expanding tourism, healthcare, food service, sports and entertainment to eventually lift domestic demand." He also expressed concern about the outlook for agricultural products, particularly corn, soybeans and meat, as Thailand is unlikely to compete with the US because America operates plantation-style, mass-scale production, resulting in unit costs that are half of Thailand's, even after including shipping costs. Nowhere in the world can produce corn as cheaply as the US and Brazil, said Mr Sompop. If Thailand does not implement import quotas on such agricultural products, Thai farmers will be affected and the government may have to spend hundreds of billions of baht annually to subsidise the sector, he said. "More importantly, allowing US agricultural products to flood the Thai market would have a serious impact on the country's food security. How can we rely on imported pork forever, or foreign corn? If a war were to break out, what would we do? This is precisely why Japan has preserved its agricultural sector, even though domestic production is much more expensive than elsewhere," said Mr Sompop. "Japan allows only a small amount of rice imports from the US, despite consuming 10 million tonnes of rice annually. The US is granted a quota of just 770,000 tonnes, or 7-8% of Japan's total domestic consumption. Japan has never truly opened up its agricultural sector to the US in any substantial way." He said Thailand must position itself as a destination where wealthy people from around the world come to use services -- to travel, eat, seek healthcare, and enjoy entertainment. "We must not abandon production, but we will no longer serve as only a base for original equipment manufacturers, because we cannot sustain that role with a 19% tariff," said Mr Sompop. LOWER EXPECTED COSTS Visit Limlurcha, president of the Thai Future Food Trade Association and vice-chairman of the Thai Chamber of Commerce, said the US tariff deals enable America to export goods to many countries without a tariff. This could significantly benefit Thai consumers, as the removal of tariffs is expected to reduce the prices of US imports. For example, animal feed ingredients and electronic components from the US could be imported for processing or use as raw materials. These changes should lower production costs and provide savings for importers, leading to decreased prices for consumers and enhancing the competitiveness of Thai exports in global markets, he said. "Consumers can also look forward to a greater variety of products," said Mr Visit. Temperate fruit such as apples and grapes from the US as well as walnuts, almonds, cosmetics, pharmaceuticals, dietary supplements and vitamins could soon become more available at lower prices, he said. High-quality American products are likely to appeal to middle- and upper-income consumers already seeking these items, said Mr Visit. Last year Thailand imported goods worth 696 billion baht from the US. In the first half of this year, imports amounted to 358 billion baht. The main items included crude oil valued at 84.3 billion baht, machinery and parts totalling 33.7 billion baht, and chemicals worth 20.6 billion. Among consumer goods, pharmaceutical and medical products accounted for 7.81 billion baht, while fruit and vegetables reached 2.27 billion baht, and cosmetics totalled 2.16 billion, according to the Commerce Ministry. LIMITED IMPACT While US products will test the competitiveness of Thai exports, particularly for processed food and chicken, Mr Visit is confident in the strength and resilience of these local sectors. He said he expects Thai processed food, particularly chicken products, to retain their competitiveness thanks to robust production and export capabilities, alongside a sufficient domestic supply at competitive prices. Any US products in this category are likely to focus on niche or non-overlapping segments, said Mr Visit. "In terms of chicken products, Thailand can remain competitive, especially if we can purchase animal feed crops from the US at lower prices. This would reduce poultry farming costs," he said. Regarding the beef market, Australia is Thailand's primary source, holding a 96.3% market share. Last year, beef imports from Australia amounted to 2.66 billion baht, followed by imports from Japan at 75 million baht and New Zealand 16 million baht. All three countries operate under free trade agreements with Thailand, benefiting from zero tariffs, said Mr Visit. Increased US beef imports offer advantages and challenges, he said. They should enhance consumer choice in the premium beef market and could drive down prices due to heightened competition, as well as motivate local producers to enhance their product quality, said Mr Visit. This shift could give premium restaurants an opportunity to diversify their menus with higher-quality beef options, catering to both tourists and local consumers, he said. On the downside, small-scale Thai cattle farmers may face difficulties in adapting due to higher production costs compared with their US counterparts, who benefit from large-scale operations and cheaper feed. Moreover, consumer safety concerns remain regarding hormone use, chemical residues, and health risks such as mad cow disease, which are significant for both governments and consumers making decisions, said Mr Visit. Cheeta Ngohpraiwan, president of the Thaibrahman Breeders Association, said imports of US beef without a tariff would definitely impact the Thai beef industry, particularly the premium segment because US beef has lower production costs. However, he said local beef typically sold in wet markets for everyday consumption would stay competitive. "To reduce the potential impact on the Thai beef industry, the government should impose limits on the quantity of US beef eligible for the 0% import tariff," said Mr Cheeta. Authorities also need to enact rigorous checks to combat the smuggling of beef, which has long plagued the mass market for beef in Thailand, he said. "Smuggled beef not only harms the local beef market, but also deprives Thailand of tariff revenue from these illegal imports," said Mr Cheeta. Addressing smuggled live cattle from neighbouring countries would also help increase local beef prices, he said. Mr Visit said Thailand can become a regional leader in cattle breeding, as its neighbours and China display a robust demand for live cattle, creating an opportunity for Thailand. By establishing a strong brand, such as "Quality Thai Beef Cattle", or achieving geographical indication status similar to Korat Wagyu, he said Thailand could enhance the value of its beef cattle and distinguish its products in the marketplace. The halal market presents another promising avenue for growth, especially in Malaysia, Indonesia and the Middle East, all of which have a heightened demand for it, said Mr Visit. "To maximise these opportunities, we must enhance the quality of the farms and cattle breeds to align with international standards, create comprehensive traceability systems, obtain global certifications, and implement proactive marketing strategies to ensure global visibility for Thai beef brands," he said. PORK SECTOR SQUEALS Sitthiphan Thankiatphinyo, president of the Swine Raisers Association of Thailand, voiced concern over the decision to open the Thai market to US pork, warning it could severely impact independent pig farmers nationwide. "If US pork enters the market, many independent farmers could be forced out of business," he said. Mr Sitthiphan said Thailand produces around 1.1 million tonnes of pork annually, primarily for domestic use. Roughly 1-2% of production is exported to neighbouring countries due to domestic oversupply. Thailand is home to more than 100,000 independent pig farmers and another 50,000 to 60,000 involved in contract farming. Large agribusinesses account for roughly 60% of total pork production, with the remainder coming from independent farmers outside of contract systems. NO PRICE WAR Kawee Sakawee, chairman of the Thai Alcohol Beverage Business Association, said Thailand does not import significant amounts of alcohol from the US. While some American beers and spirits are available in the market, they are not major players. Most of Thailand's imported alcohol products come from Europe. In recent years, imports of plum wine from Japan and soju from South Korea have increased, he said. Mr Kawee said even without import tariffs on US alcohol, it would not lead to a sudden surge of American alcohol product imports. "Some importers might test the market with trial sales of US alcohol in Thailand, which is a common approach when exploring a new market," he said. "The key factor is how Thai consumers react to these offerings." Mr Kawee recalled when Thailand temporarily waived import duties on wine last year, it encouraged foreign wine brands to enter the market. High tariffs previously limited their presence and price competitiveness. However, not all imported wine brands succeeded in the Thai market, he said. Eliminating import duties for US alcohol products could allow some premium American spirits to establish a presence in the country, but long-term success will always depend on consumer response, said Mr Kawee. Even with changing trade dynamics, he said he does not anticipate any price dumping in the alcohol industry. "Most brands are positioning themselves as premium products. Price wars would harm the industry and are not common practice," said Mr Kawee. CHIP FUTURE HAZY Phongprapha Napapruekchat, assistant vice-president at Krungthai Compass, a research unit under Krungthai Bank, said semiconductor products, which were initially excluded from the reciprocal tariffs, are now listed under Annex II in the sectoral category. This sector is expected to face additional tariff measures, anticipated to take effect by the first quarter of next year. Now only printed circuit boards are affected by the 19% tariff rate, said Mr Phongprapha. Meanwhile, Somchai Sittichaisrichart, managing director of SiS Distribution (Thailand) Plc, said smartphone makers such as Apple and producers of computer brands and networking equipment are already subject to zero duties for import into Thailand, meaning the agreement with the US eliminating tariffs on these items should have no impact.
Bangkok Post
19 hours ago
- Bangkok Post
Cambodia 'cosying up to US'
Cambodia's efforts to drag the United States into the Thai-Cambodian border conflict are an attempt to build broader support rather than marking a shift away from its close relationship with China, experts say. Dulyapak Preecharush, deputy director of the East Asian Studies Institute at Thammasat University, said although Cambodia has long leaned heavily towards China, it has flirted for engagement with the US under Hun Manet's leadership. When China appeared to stall on the construction of Funan Techo Canal, one of Cambodia's megaprojects, several months ago, the Cambodian government welcomed a US warship to Sihanoukville, a port where Chinese investments are heavily concentrated. He said if the US gains strategic access to Cambodia's naval facilities, China would likely see it as a direct challenge which could heighten tensions in the region. Mr Dulyapak said Phnom Penh is employing a two-faced strategy to balance the two superpowers and such a move is likely to disturb Beijing which has made massive economic and strategic investments in Cambodia. And from an East Asian cultural perspective, this may be viewed as a form of betrayal, he said. "China will likely try to counter this by either expanding its investments in Cambodia to counter the US or strengthening ties with Thailand," he said. He said the US cannot afford to abandon its longstanding ties and strategic alliance with Thailand, and military facilities in U-Tapao in Rayong or Thap Lamu in Phangnga hold significance to the US strategy in the Indo-Pacific region. "So even China and the US increasingly focus on Cambodia, neither can drop Thailand as they both have the grand strategy to get control in the Indian Ocean and the Pacific," he said. Cambodia, he said, appears to be doing everything it can to attract international support in the conflict with Thailand, but he warned that there is a price to pay. Major countries usually assess their strategic interests before getting involved and Cambodia must prepare for the long-term risks of this strategy, he warned. Thailand, meanwhile, must not underestimate Cambodia's geopolitical play, he said, adding that China and the US may become new players in the division of interests in the Gulf of Thailand which is already shared among Thailand, Cambodia, Vietnam, and Malaysia. "This could turn the Gulf of Thailand into a flashpoint of regional geopolitics," he said. He said Cambodia's move to take the dispute to the International Court of Justice is unlikely to make much impact because Thailand, like the US, does not recognise the ICJ's jurisdiction. "What's more important is whether Thailand decides to pursue a war crimes case against Hun Sen at the International Criminal Court," he said. 'THE MASTER OF LOBBYING' Wanwichit Boonprong, a political science expert at Rangsit University, said Cambodia's move reflects Hun Sen's pattern of breaking a deal with an existing supporter and shifting towards a new supporter who may offer greater advantages. He said this is a gamble aimed at buying favour and based on the assumption the US, which can play any role it wants in international affairs to benefit itself, can pressure Thailand. "Hun Sen thinks that using China to pressure Thailand is out of the question due to deep and longstanding ties. China simply won't interfere in that way," he said. Cambodia's shift is likely due to China's crackdown on scammer networks which has affected its underground economy, Mr Wanwichit said. Asked how Thailand should handle the situation, he said the real concern is not Thailand's position, but whether the Ministry of Foreign Affairs is ready to act, as it has come under heavy criticism for its slow response to the border crisis. He said Thailand has far more complex and attractive interests than Cambodia and it is believed a major energy company is eyeing future concessions. It also explains why Hun Sen has combined business and politics to his advantage, he said. "We must strengthen our teams first. Cambodia also underestimates Thailand. We may not be good at complaining to the international community, but we are the master of lobbying," he said. A PLAY FOR POWER Virot Ali, an international relations lecturer at Thammasat University, said Cambodia's efforts to strengthen ties with the US is unlikely to mark a shift from China. Rather, it reflects Cambodia's diplomatic approach of leaning toward whoever offers greater interest. Cambodia cannot totally shift from China due to its heavy economic reliance on Chinese investments and its current efforts to court the US are likely driven by two key factors: the border tensions with Thailand and the US reciprocal tariff. Cambodia has been granted a 19% tariff rate which is favourable given that it faced a 49% US tariff, he said. Mr Virot said, however, that US-Cambodia ties are unlikely to turn into meaningful gains on the global stage and that in the border dispute, Thailand is more likely to receive broader support in international forums. On the territorial claims, Cambodia could petition the ICJ but the matter is not about international support, but whether Thailand will take part in the legal process, he said. So far there is no sign of the US or China taking a stance on the border conflict. He said Cambodia's international campaign is aimed at pressuring Thailand, but has had little real impact. "There are facts on the ground and foreign news agencies in Thailand understand the situation that Cambodia didn't respect the ceasefire pact and targeted civilians," he said. When asked about Cambodia's plan to revive military exercises with the US, he said it is clear the US wants to reassert its presence in the region after more than a decade of keeping a distance. This is part of the larger strategy to contain China's influence and its re-entry into the region has implications especially for Beijing while Thailand must decide how it will navigate the tensions between these two powers, he said. US RE-ENGAGEMENT Panitan Wattanayagorn, an independent national security scholar, said the US ties with Cambodia should prompt Thailand to be more vigilant and adjust its relationship with the US especially through long-standing military ties. He said if Thailand does not act, Cambodia may turn even more unfriendly towards Thailand while noting that recent remarks by the incoming US ambassador are a cause for concern as they suggest trust issues and a distant relationship. Regarding a delegation from the Royal Cambodian Armed Forces visiting the US Indo-Pacific Command, he said Cambodia wants to develop an air force and needs US assistance while China remains Cambodia's primary partner in naval development. This is Phnom Penh seeking a balance between China and the US and Thailand will have to find a new balance, too, he said. When asked whether Cambodia's ties with the US could give Phnom Penh an edge on the international stage, Mr Panitan said there is a possibility given Washington's ambiguous stance toward Thailand. He added that the equal 19% tariff granted to both countries could be perceived as a diplomatic win for Cambodia. Regarding the territorial claims, he said Cambodia, which as a small country, needs international backing and has drawn up a foreign policy "game" and followed it, but Thailand might have underestimated its play. He suggested Thailand should press Unesco and the global community to urge Cambodia's withdrawal from ancient ruins and use a bilateral framework for negotiations. Mr Panitan said Thailand has recently begun to counter Cambodia's play, but it is not on the offensive yet. "We must broaden our diplomacy to reduce Cambodia's ability to twist information at global forums and bring the dispute back to bilateral talks. That's what we must do and we haven't done enough of it," he said.
