27-05-2025
Thai industry braces for Trump tariffs, anticipates THB200bil export blow
To address the Trump tariffs, an industrial restructuring in Thailand aims to ensure that it remains a key production base for one-tonne pickups and ECO Cars.- Facebook/Toyota Motor Thailand via The Nation/ANN
BANGKOK: Thailand's Office of Industrial Economics (OIE) has issued a stark warning: new "Trump tariffs" could slash the country's industrial exports by approximately 200 billion baht (US$6.14 billion) in 2025.
This projected hit would reduce industrial GDP growth by 1.02 percentage points, prompting the OIE to accelerate a major restructuring of nine key industrial sectors.
The OIE had initially forecast industrial GDP growth of 1.5-2.5 per cent for 2025. However, due to the looming impact of US tariff measures, this projection is now expected to be lower, with a revised estimate due in May 2025.
For 2026, industrial economic conditions are anticipated to grow at a similar pace to the present, mirroring global trends and supported by strong tourism and government stimulus.
Thailand has less than two months to negotiate with the United States to finalise details of US President Donald Trump's proposed import tariff increases.
OIE Director-General Passakorn Chairat confirmed to Krungthep Turakij that while the US announced reciprocal tariffs in April 2025, imposing a 36 per cent levy on Thailand, the implementation has been delayed by 90 days for negotiations.
He expects Thailand's economic outlook and trade policy direction to become clearer after July 2025, forecasting that the US will likely impose tariffs of 10-20 per cent on Thai imports.
The Bank of Thailand (BOT) initially estimated that the US tariff policy could limit 2025 GDP growth to less than 2.5 per cent, largely due to a slowdown in investment and exports.
Passakorn added that Thai industries could face heightened competition from other countries diverting exports to traditional Thai markets, potentially leading to cheaper goods entering Thailand.
Structural issues within Thai industry and stubbornly high household debt also remain significant challenges.
Passakorn outlined the OIE's strategy to bolster national competitiveness, driven by the fact that Thailand's economy heavily relies on industrial exports for income, employment, and investment.
This makes the sector highly susceptible to global economic conditions and external factors.
The industrial restructuring initiative will prioritise adapting industries to meet global demands, building resilience, and fostering new industries.
The OIE has identified nine target industrial sectors for this overhaul, collectively representing 70 per cent of manufacturing GDP:
Automotive: Focus on electric and hybrid vehicles, ensuring Thailand remains a key production base for one-tonne pickups and ECO Cars.
Petrochemicals & Plastics: Promote bioplastics and recycled plastics, aligning with environmental trends and supply chains.
Bio-based Industry: Leverage biotechnology for high-value products like sustainable aviation fuel (SAF) and biopharmaceuticals.
Food: Develop essential food products for security and "Future Foods" such as health, functional, and alternative protein sources.
Medical Devices: Focus on devices for prevalent non-communicable diseases (NCDs) like heart disease, diabetes, and cancer.
Iron & Metallurgy: Enhance competitiveness and move towards "Green Steel" production.
Robotics & Automation: Encourage industrial adoption to cut costs and boost efficiency.
Electrical & Electronics: Attract investment in high-tech areas like semiconductors and data centres, and upgrade existing appliance production.
Textile & Garment: Focus on high-value, sustainable products across the entire supply chain, from technical fibres to eco-friendly fashion.
The restructuring measures have been drafted and are expected to be submitted to the Cabinet within two months. Once approved, relevant government agencies will allocate budgets to implement these sectoral development plans. For instance, the Ministry of Finance will lead tax-related initiatives for the automotive sector.
"If the automotive industry achieves its goals, Thailand will become a significant global base for modern vehicle production, providing quality, clean, economical and safe vehicles to its citizens," Passakorn concluded, adding that this transition would also create jobs and align with global development trends. - The Nation/ANN
