The Federation of Thai Industries (FTI) will revise its export growth projection for this year to 0-1%, blaming the deepening US-China trade war for dampening economic sentiment.
The FTI previously forecast exports in 2019 to expand 3-5%, downgraded from an earlier outlook of 5-7%.
Kriangkrai Tiennukul, the FTI's vice-chairman, said the trade war is threatening trade and investment around the world.
The export sector contributes roughly 70% to Thai GDP.
Mr Kriangkrai said Thailand's exports to China account for 12% of total export value, while shipments to the US account for 10%.
Shipments to Southeast Asia represent 25% of the country's export value.
"Thailand cannot avoid any negative momentum from the trade war," Mr Kriangkrai said. "Thailand's industrial sector is part of global supply chains."
The FTI called on the new government to set up an ad hoc committee to follow up and monitor the consequences of the trade war for the industrial sector.
"The new committee should focus on each industrial sector in order to be prepared with urgent measures," Mr Kriangkrai said. "Four ministries -- Industry, Commerce, Finance and Labour -- have been requested to join the ad hoc committee."
For the FTI's internal study, the federation is collecting all related data from 45 industrial sectors, mainly emphasising shipments to the US.
"Thailand is ranked 11th or 12th on the US government's watch list for trade deficits, and the FTI is concerned that the US could possibly place import tariffs on Thai products," Mr Kriangkrai said. "Thailand should proceed with shipment policies very carefully."
The FTI is also worried about products being dumped into Thailand from China as the latter seeks new markets.
"China's products are entering Thailand through e-commerce channels via Alibaba and Shopee," Mr Kriangkrai said. "Some products from China can replace Thai-made ones because Chinese manufacturers can produce at lower cost, while some products can be imported through bordering countries."
Mr Kriangkrai said the trade war could spur many Chinese manufacturers to leave their home country to establish new production facilities in Southeast Asian countries, especially Thailand and Vietnam.
"We are worried that Chinese factories will pass industrial quality standards, particularly for environmental issues, so the government should tighten conditions for them," he said.
Thailand has the flagship Eastern Economic Corridor scheme luring many overseas investors, including those from China.
Mr Kriangkrai said the FTI is asking the next government to revise the country's investment strategy to tackle the trade war issue.
The new government should speed up negotiations to establish trade agreements with other countries and help Thailand expand to new markets, he said.
"Thai investment policies should be revised in terms of offering incentives and privileges," Mr Kriangkrai said. "Exporters should seek new markets as well, in order to diversify trade war risks, and Southeast Asia has good potential."