Thailand's economy is expected to be slightly affected if China has to cut its domestic manufacturing for goods subject to US tariff penalties, says the government's planning unit.
Wichayayuth Boonchit, deputy secretary-general of the National Economic and Social Development Board, said Thailand's economy is estimated to contract by 0.033% if China reduces its domestic manufacturing of all products that are subject to the US import tariffs.
The United States Trade Representative announced on April 3, 2018 that the US would impose tariffs on US$46.41 billion worth of Chinese imports.
The proposed lists covers 19 categories and 1,333 items. Those products include electrical machinery and components, lenses, automobiles, aluminium products and pharmaceuticals.
But Mr Wichayayuth said the Thai economy is set to gain if US imports goods from other countries including Thailand in lieu of China.
In an earlier study by the University of the Thai Chamber of Commerce (UTCC), Thailand is forecast to gain more than it loses from the US-China trade spat, with exports estimated to increase by 8.53-21.34 billion baht or 0.06-0.16% of GDP.
The latest study by the UTCC found greater Thai shipments to China and the US are expected as a result of lower shipments between the two economies because of reciprocal tariff hikes.
Aat Pisanwanich, director of the UTCC's Center for International Trade Studies, said the trade standoff will increase imports of Thai products as replacement goods, especially machinery, electrical products, electronics, steel and steel products, rubber products, and cars and parts to the US. Higher shipments to the US market are estimated at 5.19-12.99 billion baht.
Thailand is projected to ship more wheat, corn, cars and parts, plastic, and aluminium to China, worth 3.34-8.35 billion baht.
But the study found in terms of the supply chain, Thailand is expected to see exports drop to China and the US by a combined 466 million to 1.16 billion baht, or 0.003-0.009% of GDP.
US imports of Thai raw materials make up only 0.1% of its total production, while Thai raw materials account for only 0.2% of the mainland's total production.
Mr Aat said an indirect consequence is Thailand is expected to become a dumping ground for US and Chinese products affected by higher tariffs, adding an estimated 6.05-15.12 billion baht worth of such products, including machinery, electrical appliances, electronics, aluminium, steel and steel products.
He suggested Thailand ramp up its production chain with the US and China.