Thailand should prepare for risks that may arise from the aggressive trade policies of US President-elect Donald Trump, who will be sworn in on Jan 20 for his second term in office, say experts on international affairs.
Mr Trump's threats to increase tariffs on US imports have made governments around the globe anxious about the implications for their economies.
Under his election campaign on the "America First'' theme, pledging to levy tariffs of 10-20% on all imported goods and 60% or more on Chinese goods, Mr Trump said the high taxes on imports will help reduce the massive US trade deficit, budget deficit and increase investment in the country.
The Thai government and business sector should closely monitor US trade and economic policies as they could have an influence on the economy and trade environment, the experts say.
They are also worried Mr Trump's economic policies could decrease US investment in Thailand, especially in manufacturing, and slow down technology transfers, putting restrictions on access to advanced technologies.
The Bangkok Post talked to the Thai experts to get their insights on how the nation should prepare.
Tariff war harms growth
Sineenat Sermcheep, director of the Asean Studies Center, Faculty of Economics of Chulalongkorn University, said Mr Trump's economic policies might prioritise trade protectionism by imposing large tariffs to protect domestic industries.
These measures may harm US trade partners, increase global uncertainty, and have a negative impact on the US economy, reducing global growth, she said.
High tariffs on imports from China and other countries could lead to trade wars, disrupt global supply chains, and impede global trade. These tariffs are likely to increase costs for American consumers and manufacturers who rely on imported goods for their production processes.
As trade and US foreign direct investment (FDI) are key engines of Thailand's economic growth, Mr Trump's economic policies and higher tariffs pose downside risks for the Thai economy by slowing exports and deterring FDI.
On trade, Ms Sineenat said the US is a major Thai export market, particularly for products such as computers, electronics, and electrical appliances, and these exports can be hit directly by higher tariffs.
"Furthermore, the influx of Chinese goods might increase competition in the Thai market. This is because Chinese exports to the US market may face high tariffs, so they might look for new markets, and Thailand is one of them. This intense competition might affect local producers and slow down the recovery,'' Ms Sineenat said.
She said global investment and FDI to Thailand may slow because of rising economic uncertainty. Foreign investors could postpone their investment plans to wait for clearer signals.
"Moreover, Mr Trump's reshoring strategy might increase investment in the US while decreasing foreign investment elsewhere. This increases the likelihood that fewer investments will move to Thailand.
"So Thailand needs to prepare by adjusting its competitiveness, diversification and encouraging more regional cooperation,'' she said.
Thailand, she said, needs to strengthen its local manufacturing capacity to be more competitive in the global market, leveraging technology and sustainable development by investing in advanced manufacturing technologies, digitalisation, green industries, and renewable energy while also strengthening its business environment to attract a diverse range of FDI.
These would be especially important as the Trump administration pulls away from US climate action goals.
Thailand also needs to diversify its economic partnerships by expanding trade ties with other major economies to reduce dependency on any single market. It should also firm up economic ties with economies including the European Union, Japan, South Korea, Taiwan, and the Middle East, Ms Sineenat said.
Finally, Thailand needs to encourage Asean to enhance intra-Asean trade to deepen regional integration, which would enhance economic resilience.
Panitan: More pressure to take regional responsibilities
More regional responsibility
Panitan Wattanayagorn, a former lecturer on international affairs at the Faculty of Political Sciences, Chulalongkorn University, says Thailand must brace for the economic impacts of a Trump-led administration, particularly regarding US-China trade tensions.
Any slowdown in China's economy will inevitably affect Thailand, given their interconnected trade relationships, he said. Thailand may also face tougher negotiations on tariffs and trade balances, requiring strategic adaptability.
The second Trump administration could push Thailand to take on more regional responsibilities, including addressing human rights issues, combating illegal fishing and tackling human trafficking.
Such pressures might serve as leverage in trade talks, with Washington tying economic incentives to Thailand's cooperation on these fronts, said Mr Panitan.
He believes former prime minister Thaksin Shinawatra's influence and direct communication channels with US leadership could help the government solve some of these problems.
However, Mr Panitan also cited risks related to transparency if the government relies on Mr Thaksin's help, suggesting the former premier may benefit instead.
Transparency will be critical to avoiding any public backlash and ensuring that any collaboration benefits Thailand as a whole, said Mr Panitan.
Virot: Thailand risks losing out to neighbours
Virot Ali, an international relations lecturer at Thammasat University, underscored the need for Thailand to prepare for a rapidly changing global economy.
He said Mr Trump's policies, if consistent with his first term, may stimulate shifts in global trade and technology. While the US can benefit from stabilised oil prices and reduced strategic tensions, these changes could intensify competition in global markets.
Thailand, with its outdated industrial framework, risks losing out to more dynamic economies like Vietnam, Malaysia, and Indonesia. He emphasised the importance of embracing the "Fourth Industrial Revolution" by modernising production systems and diversifying trade markets.
Failure to adapt could leave Thailand struggling to attract investment and keep pace with its regional peers, he said.
While Trump's policies could disrupt global trade, they also offer opportunities for Thailand to realign its economic strategies. By expanding domestic consumption and opening new markets, the nation could mitigate potential losses.
He also believes Mr Thaksin's past business dealings with Mr Trump could serve as a diplomatic asset, saying these connections might ease existing tensions and create openings for further collaboration.
He said he expects Prime Minister Paetongtarn Shinawatra's administration to leverage these ties to help Thailand navigate economic challenges.
Anekchai: China containment could hurt Thailand
Myanmar and Indo-Pacific
Mr Panitan went on to say that one area where the US might exert more pressure is Myanmar, given its proximity to Thailand.
Mr Panitan believes Washington will expect greater Thai involvement in addressing the crisis there, although Thailand's role in issues in the South China Sea is likely to remain minimal.
He predicts the US will continue leveraging Asean alliances to counterbalance China's influence, particularly in the South China Sea, with countries like the Philippines and Indonesia likely to be encouraged to play more active roles.
Anekchai Rueangrattanakorn, Silpakorn University's adjunct lecturer in Political Sciences, said Mr Trump's second victory may stem from his clear action on how to contain China's global influence in a bid to retain America's supremacy.
However, the containment of China may affect Southeast Asia as this area has become a geopolitical hotspot because of the Myanmar crisis and issues in the South China Sea.
On the Myanmar crisis, Mr Anekchai said even though the United States has not prioritised the Myanmar crisis or its strategic importance compared to the Middle East, Washington cannot ignore this crisis as it did in 1990-2010.
He said this is because the United States has finally realised Myanmar has not changed or given importance to democracy and human rights protection as expected after Washington imposed sanctions on the country in response to the uprising there on Aug 8, 1988.
The so-called 8888 Uprising, also known as the People Power Uprising, was a series of nationwide protests, marches and riots in Myanmar (then known as Burma). The key events occurred on Aug 8, 1988.
This event persuaded Myanmar to forge strong bonds with China, which affected America's aim to maintain its leadership and influence in Southeast Asia, Mr Anekchai said.
During Joe Biden's soon-to-end administration, Washington announced a tough policy on Myanmar, which effectively cut its access to the Tatmadaw.
Mr Anekchai said that even though the Trump administration may not pay as much attention to democracy and human rights as the Biden administration, he believed Mr Trump would need to bond with Myanmar while also backing the anti-Tatmadaw movement, saying it would be the best way to maintain American influence and leadership in the region.
This could also create the perception that Washington aims to create a systematic alliance that co-creates security and fair economic growth while developing democracy and human rights in Asean as a way to contain Chinese influence over the region, he said.
"President Trump would open the door for Myanmar and China to foster a closer bond because Myanmar has strategic importance for China," he said.
