It never rains but it pours. The old saying seems to perfectly match Thailand's current situation as the country not only confronts a raging pandemic while trying to rehabilitate a fragile economy, but must also deal with external headwinds ignited by the bitter trade dispute between the US and China.
Although the US has a new president in Joe Biden, the trade spat between the two giant economies remains far from resolved, as the Biden administration has not made any major changes to the policies it inherited from former President Donald Trump.
Though he represents a different political party, Mr Biden has maintained a tough trade stance with Beijing.
Mr Biden insisted existing tariffs be kept in place for now as he looks to boost the US economy, which was hit hard early in the pandemic but is now recovering.
Beijing also maintained duties on some imports from the US.
Mr Biden signed an order early this month amending a ban on US investment in Chinese companies begun under his predecessor, naming 59 firms with ties to China's military or the surveillance industry, including Huawei Technologies and the country's three biggest telecommunications firms.
The ban on new investments takes effect from Aug 2. It is the most sweeping executive order targeting Chinese entities since Mr Biden took office.
China immediately vowed to take necessary measures to protect Chinese companies' rights and interests.
At recent summits of the Group of Seven (G7) and the North Atlantic Treaty Organization, Mr Biden lobbied his European allies on the need to stand up to China's rising influence, human rights violations and economic rule-breaking.
At the G7 summit in the southwestern British county of Cornwall, the group backed a new global plan dubbed the Build Back Better World (B3W), which is an obvious challenge to China's massive Belt and Road Initiative (BRI).
These developments show the escalating trade war between China and the US will not change under the Biden administration.
NEW COLD WAR
Aat Pisanwanich, director of the Center for International Trade Studies at the University of the Thai Chamber of Commerce, said the trade war between the US and China during Biden's administration is likely to escalate and become more serious than it was under Mr Trump, when it focused mainly on the trade deficit and intellectual property violations.
"This could be a new cold war era and we may see real action starting next year," said Mr Aat.
"This year, the US government is expected to gear up its plans to counter China by proposing many laws such as the Strategic Competition Act of 2021 and the Innovation Act, aiming to curb Beijing's growing influence in the world."
At the recent G7 summit, Mr Biden approached US allies in Europe to set up funds to counter China on international politics, economics, infrastructure development, he said.
Beijing vowed to fight back and passed the Anti-Foreign Sanctions Law to retaliate against what it deems discriminatory measures by other countries.
"Thailand needs to carefully balance the supply chains of China and US," said Mr Aat. "Responsible authorities should pay attention and be prepared regarding three product categories."
The first category is products where Thailand enjoys a trade surplus over the US, including agricultural and processed agricultural products, machinery, electrical appliances, seafood, rubber products and processed vegetables and fruits.
Another category is products that affect the environment, such as oil palm and rubber, he said. The third category is products with a large future market, such as artificial intelligence, semiconductors, electrical circuits, robots, information technology, health and bioscience.
"For the first category, Thailand should be aware of new retaliatory measures against Thai products," said Mr Aat. "For the second category, Thailand should prepare for protectionist measures, particularly for products made in factories that emit high carbon monoxide levels, such as energy and energy-related products."
CLASH WARRANTS CLOSE WATCH
Kriengkrai Thiennukul, vice-chairman of the Federation of Thai Industries (FTI), warned the B3W initiative may lead to a new economic confrontation between the G7 and China.
The push by the group of wealthy liberal democracies for a new global infrastructure development competes directly with China's BRI scheme.
"The conflict may develop from a US-China trade war into a larger scuffle involving other regions," said Mr Kriengkrai.
However, G7 members Germany, France and Italy indicated they are not adopting a hostile stance towards China, but merely want to build a power balance between the G7 and China.
"These three countries and China are interdependent economically," he said.
China buys machinery and technology from Germany, while Italy and France earn revenue from Chinese tourists.
Mr Kriengkrai believes the US, the UK and Canada are taking a more antagonistic approach with China.
The G7 members cited Beijing's human rights abuses of the Uyghur minority and China's allegedly unfair trade policies as key reasons behind their B3W plan.
"If this becomes more than a trade war, Thailand may become entwined in political games," he said.
The FTI urged the Thai government to monitor the confrontation and base its actions on national interests. Economic and political policies must strike a balance China and the G7, said Mr Kriengkrai.
He does not anticipate any negative effects for the Eastern Economic Corridor scheme, which the government wants to connect with China's BRI.
The government's plan to build a high-tech industrial hub in Chon Buri, Rayong and Chachoengsao on the Eastern Seaboard has drawn a number of investors, mostly from China and Japan.
CLEAN ENERGY SPOTLIGHT
According to the FTI, Thailand must emphasise clean energy development because the B3W partnership aims to drive global efforts to cope with climate change caused by global warming.
Together with their support of global infrastructure investments, G7 leaders have agreed on the need to help countries achieve the goal of the 2015 Paris Agreement to reduce greenhouse gas emissions.
Suvit Thoraninpanich, chairman of the FTI's renewable energy industry club, said current efforts in Thailand to promote renewable resources for power generation and use of biofuels in the transport sector are insufficient.
The government needs to step up its efforts if it is determined to meet its net zero goal in curbing carbon emissions, he said.
Also known as carbon neutrality, the goal requires countries to strike a balance between emissions and absorption of carbon dioxide from the atmosphere.
Mr Suvit said Thailand's energy authorities should prepare to receive requests from the private sector interested in more environmentally friendly electricity generation.
Investors in Thailand are demanding a better quality power supply, he said. They not only require sufficient supply, but also electricity that is based on clean energy sources.
"Most exporters are original equipment manufacturers who need to satisfy the [environmental] requirements of their customers in the US, Europe and Japan," said Mr Suvit. "Many of these nations have rules that require manufacturers to emit less carbon dioxide."
He said the FTI plans to talk with the Energy Regulatory Commission on June 30 regarding its plan to set up an institute to work on carbon emission issues that will play a more important role in international trade.
Mr Suvit called on the government to accelerate its peer-to-peer power trading scheme, currently in the sandbox stage, to commercial scale.
"Within five years, fossil fuel-based power generation will be disrupted in the same way digital technology disrupted the telecom sector two decades ago," he said.
EASY DOES IT
Nuttapon Nimmanphatcharin, president and chief executive of the Digital Economy Promotion Agency, said the G7 initiative on infrastructure funding for developing countries includes support and investment in Asean, a move that could counter the influence of Beijing in the region.
China has been expanding its political and economic power in Asean for decades, especially in Cambodia, Laos, Indonesia and Malaysia, he said.
Laos is building a high-speed train project with financial support from China, while Cambodia is constructing a naval base in collaboration with China.
Unicorn startups in Malaysia and Indonesia mostly raise funds from venture capitalists in China.
With G7 more focused on Asean in providing infrastructure and funding support, Vietnam could be a major target of assistance as the country is an emerging economy geared towards the transition from old industry to more dynamic approaches and innovations, said Mr Nuttapon.
He said Thailand should handle the new geopolitical move with proper care. Thailand has more recent ties to China in terms of investment cooperation than G7 countries, said Mr Nuttapon.
"Thailand cannot take sides, choosing one and ignoring the other," he said.
If Vietnam gains a competitive advantage over Thailand through an economic alliance, especially for investment in heavy industry, Thailand should scale up efforts to improve its industrial ecosystem to create more investment opportunities, said Mr Nuttapon.
He said Thailand still has the potential to draw foreign investment because of its geographic location, social aspects and digital services.
Thailand can benefit from close cooperation with neighbouring countries in various industries, such as logistics capitalising on the high-speed train project in Laos, said Mr Nuttapon.
GEOPOLITICAL CHESS
Chaiwut Thanakhamanusorn, the digital economy and society minister, said Thailand has held a neutral policy for a long time and the G7 funds require careful consideration.
Sisdivachr Cheewarattanaporn, president of the Association of Thai Travel Agents (Atta), said Thailand should balance the political and economic influence of both the US and China as both countries are important to the tourism industry.
Beijing may maintain stringent border controls until the end of this year to safeguard against the virus, as many surrounding countries continue to wrestle with outbreaks, he said.
Thailand has to be careful about international relations with the mainland as it could affect the tourism market post-pandemic, said Mr Sisdivachr.
"Even if Thailand can reopen in 120 days as planned, if relations between the two countries have deteriorated, the Chinese market may not return as expected," he said.
In 2019, 10.9 million Chinese tourists generated 530 billion baht -- the highest tally for a source market in Thai tourism history. But it is a sensitive market because its government can influence the direction of the outbound tour business at any time by imposing a ban, said Mr Sisdivachr.
The US and Thailand also have a long and established relationship. Prior to the pandemic, 1.16 million US tourists spent 76 billion baht in Thailand, one of the highest spending averages per tourist.
In addition to tourism and trade, the number of Thai students who graduate from the US each year has helped strengthen the bond between the two countries.
"Both are great alliances for us," he said.
"When tension emerges between the two powerhouses, Thailand should be careful about diplomatic approaches, instead not taking a side and maintaining our dignity."
Mr Sisdivachr said Singapore is probably the only country in Southeast Asia that stood up and voiced concerns about the trade war, as Prime Minister Lee Hsien Loong has occasionally made comments about the impact of the US-China spat in the region.
"Tourism, trade -- everything is about politics. The character of a nation's leader is crucial as that position can represent the whole country," said Mr Sisdivachr.