Trump policy predictions divide Thai business opinion

Trump policy predictions divide Thai business opinion

An image of president-elect Donald Trump appears on a television screen on the floor of the New York Stock Exchange on Wednesday. (AP photo)
An image of president-elect Donald Trump appears on a television screen on the floor of the New York Stock Exchange on Wednesday. (AP photo)

Thai business leaders have mixed views on the impact of the coming Donald Trump presidency, with the majority expecting to see effects on international trade.

Isara Vongkusolkit, chairman of the Thai Chamber of Commerce, said the private sector is mainly concerned about possible changes in US international policy but added that they still hope that Mr Trump, as a veteran businessman, will truly understand the way to deal with international trade.

Mr Isara predicted an insignificant impact from Mr Trump's victory on Thai exports, as plans for the US to shut its doors to imports are hardly feasible.

Nonetheless, Mr Isara said Thai operators and exporters have to prepare themselves for possible changes and look for export opportunities in new markets such as Africa, Iran and Pakistan.

Nopporn Thepsittha, president of the Thai National Shippers' Council, said Mr Trump's election victory in the short term may create turbulence in world trade until the first or second quarter of next year, on top of the adverse impact of Britain's departure from the EU.

Mr Trump expects to revamp several trade and investment policies to emphasise lending for small and medium-sized enterprises and make them stronger.

The policy will likely to boost the US economy rapidly, resulting in increased shipments of Thai exports to the US.

"Mr Trump has proclaimed to first protect the Americans' interests," Mr Nopporn said. "International trade talks on key pacts may move back to square one."

He noted that protectionism from Mr Trump's policies will give Thailand a chance to avoid joining the US-led Trans-Pacific Partnership, which is one of the policies that Mr Trump will ignore.

According to Mr Nopporn, international relations, particularly with China and Russia, are likely to improve with Mr Trump's victory, which will be good for the global trade climate.

Boonyarit Kalayanamit, director-general of the Trade Negotiations Department, said Thai exporters have to prepare for the negative impact of Mr Trump's trade policies and look for new markets to substitute for the US, citing Mr Trump's campaign focus on protectionism and isolationism.

He said a Trump presidency on trade will break from the traditional Republican commitment to free trade, imposing a set of protectionist policies to close America's economic borders.

Mr Boonyarit said it is yet to be seen whether Mr Trump's campaign promises will be realised.

The US is currently Thailand's third-largest trading partner, after China and Japan. Two-way trade with the US totalled US$37.92 billion in 2015, with exports to the US making up $24.05 billion or 11% of Thailand's total exports.

Chen Namchaisiri, chairman of the Federation of Thai Industries, called it too early to evaluate the impact of Mr Trump's triumph on the Thai economy but said the FTI would monitor the fallout closely.

He said that despite the fall in world markets upon Mr Trump's victory, he expected it to be short-term.

"In the longer term we expect the situation to change rapidly, but it is really unpredictable and hence we need to observe closely how Mr Trump would manage to lead America and the impact on Thailand," he said.

Warotai Kosolpisitkul, deputy director-general of the Fiscal Policy Office, said Mr Trump's presidency is a threat to the global economy because he does not have specific policies, and this could erode investor confidence and disrupt investment.

Moreover, investors will seek to allocate more assets into safe havens, including the Swiss franc and gold, and avoid the US dollar, he said.

For the impact on Thailand, Mr Warotai said capital outflows are expected to be spotted in the short run, but he is not expecting to see any long-term threats to the Thai economy.

But it warrants monitoring as to whether the US will seek ways to lower imports from Vietnam and China, which have huge trade surpluses, he said, adding that Thailand could feel indirect effect as some products shipped to China are used for re-export to the US.

Patrick Basset, chief operating officer for Upper Southeast and Northeast Asia for AccorHotels, said the Trump victory was quite surprising for the whole world, given his unusual policy positions.

"I think there will be no impact on the Thai tourism industry after Trump's win, as the market for American tourists in Thailand is smaller than for Asia and Europe," he said.

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