President Donald Trump's order for a 90-day suspension of US reciprocal tariffs for countries that do not retaliate, including Thailand, has prompted a positive response from investors as global stocks surged in a relief rally.
Trump stated on Truth Social that tariffs would be delayed for more than 75 countries, signalling Washington's willingness to negotiate with cooperative partners and refrain from immediate retaliatory measures.
This policy was backed by the US Commerce Department, US Treasury Department and the US Trade Representative, aiming to create space for dialogue.
According to KGI Securities (Thailand), the tariff for countries willing to negotiate is only 10% for the next three months.
CLASH OF THE TITANS
However, Trump raised the tariff rate on China to 125%, compared with 104% the day before, indicating the clash between the two economic giants will continue, said Rakpong Chaisuparakul, senior vice-president of KGI.
"This issue will continue to spur global market volatility. Investors should continue to monitor how the US-China conflict pans out and how Thailand negotiates with the Trump administration," he said.
The Stock Exchange of Thailand (SET) index jumped in line with other Asian bourses, rising 4.45% or nearly 50 points to finish at 1,136.58 points by midday, with trading value of 50.9 billion baht.
Shares of Delta Electronics (Thailand) led gains with a 15% increase to 69 baht, followed by an 8.28% rise for Airports of Thailand (AOT) to 39.25 baht and a 7.55% surge of Krungthai Bank (KTB) to 22.80 baht.
Incorporating a 90-day delay to 36% tariffs as well as the chance for negotiations, KGI projects Thai GDP growth to slow to 2%, down from a previous outlook of 2.6%.
The Bank of Thailand's Monetary Policy Committee is expected to cut the policy interest rate to 1.25% by the end of 2025, noted Mr Rakpong.
"Regarding forex assumptions, we are reviewing our dollar/baht forecast and will likely go for a weaker baht compared with the current projection of 32.80 baht to the greenback, depending on the extent of global tariffs and the outcome of negotiations between Thailand and the US," he said.
Vathan Jitsomnuk, director of strategic analysis at Pi Securities, said even though global stocks reacted positively to Trump's pause on reciprocal tariffs, the market cannot trust Trump.
"We have learned he changes his mind frequently, including his tariff decisions on Canada and Mexico," said Mr Vathan.
"As long as the trade war and US-China controversies linger, global trade will remain slow and the Thai economy will remain under threat."
NEGOTIATION PREPARATION
Thanavath Phonvichai, president of the University of the Thai Chamber of Commerce, said the 90-day suspension of US tariffs gives officials more time to prepare a response.
If Thailand could negotiate to reduce the tariff rate to 10%, the damage could be 100-150 billion baht (US$2.93-$4.4 billion), lowering growth by 0.7 to 0.9 percentage points, he said.
Poj Aramwattananont, chairman of the Thai Chamber of Commerce, said the government urgently needs to establish a "Team Thailand" headed by the prime minister, the deputy prime minister for economic affairs, the commerce minister and other key ministers.
He also proposed including the Joint Standing Committee on Commerce, Industry and Banking to gather insights from significant stakeholders.
The lead negotiator should hold a ministerial position, with the Commerce and Foreign Affairs ministries acting as the main agencies in this initiative, said Mr Poj.
He said it is crucial to receive input from other relevant institutions, such as the Agriculture and Cooperatives Ministry and the Board of Investment.
Visit Limlurcha, president of the Thai Future Food Trade Association, said the tariff delay could either stabilise or even lift exports in the second quarter, as importers may rush to stock up on goods during this interval.
Ongoing negotiations with various countries will play an important role, he said.
"If competitor nations manage to secure lower tariff rates within the 90-day time frame, it could lead importers to choose goods from those countries over Thailand if those nations receive more advantageous tariff reductions than Thailand," said Mr Visit.
HIGHER PRODUCTION
Manufacturers should take the opportunity to increase production during the 90-day tariff pause, said Kriengkrai Thiennukul, chairman of the Federation of Thai Industries.
"Producers should speed up goods output for export within the 90-day window," he said.
After Trump announced the tariff delay, many entrepreneurs began to receive more purchase orders, causing them to increase production, said Mr Kriengkrai.
The delay is short, but has had a positive impact on the manufacturing sector, he said.
"We have to export more goods to trading partners who want to increase stocks," said Mr Kriengkrai.
While government agencies and the business sector have more time to brace for higher tariffs, they need to be careful about uncertainties in Trump's tariff policy, he said.
The 36% tariff on Thai exports to the US was set to take effect on April 9, then Trump issued a reversal.
"This led to confusion among exporters and logistics operators," said Tanit Sorat, vice-chairman of the Employers' Confederation of Thai Trade and Industry.