Trump policy may dent Thai exports

Trump policy may dent Thai exports

The government expects the country's overall exports to be slightly affected if the US government introduces punitive measures to tackle its trade deficit as pledged, says Deputy Prime Minister Somkid Jatusripitak.

The impact on Thai exports is unlikely to be as bad as many fear, Mr Somkid said after a recent meeting with related state and private agencies, including the Bank of Thailand, the Finance Ministry, the Foreign Affairs Ministry, the Commerce Ministry, the Federation of Thai Industries and the Thai Chamber of Commerce.

He said Thailand has a slight trade surplus with the US.

Thailand's trade surplus with the US amounted to US$19 billion (657.4 billion baht) last year, ranking 11th among the top 15 countries. The biggest surplus was with China at $347 billion, followed by Japan ($69 billion) and Germany ($65 billion). Among Asean countries, Vietnam enjoyed a $32-billion trade surplus and Malaysia $25 billion, according to the US Census Bureau.

US President Donald Trump signed a pair of executive orders last week to investigate US trade imbalances and vowed to reverse the country's trade deficit.

One of the orders gives the US Commerce Department 90 days to make a report on the factors behind the trade deficit, while the second seeks to increase the collection of tariff duties on imports.

Mr Somkid said Thailand is willing to provide all requested information.

"The US's trade deficit with Thailand is quite minimal compared with other countries," he said. "Thailand's exports to the US represent only 10% of the total, mainly for electronics parts, which are bought by US firms [operating in Thailand]. Those electronic parts are mostly shipped back to be assembled in the US, creating jobs and income for the US."

Mr Somkid said Thailand's trade surplus is mainly due to the private sector's activities, not because of baht manipulation or intervention by state officials, citing statistics which show the currency is still appreciating.

He said big private Thai companies are planning to invest more in the US, while Thailand plans to buy more Boeing aircraft and weapons from the country.

But Mr Somkid said Thai exporters will be able to find new export markets if the US government enacts punitive measures that hurt Thai exports.

Commerce Minister Apiradi Tantraporn earlier said that trade officials were studying the possible impact from any upcoming measures that might affect Thailand, especially in sensitive areas such as intellectual property, tax and non-tax privileges.

No short-term impact will be seen, she said, adding that the ministry would keep its 5% export target for 2017.

Meanwhile, Chen Namchaisiri, chairman of the Federation of Thai Industries, said the private sector should brace for the consequences of US policy.

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