Bangkok: The private sector is closely monitoring the upcoming US presidential election, as it holds significant implications for both the Thai and global economies. The election, which pits former President Donald Trump against Vice President Kamala Harris, is expected to influence trade policies that could affect Thailand’s economic dynamics. If Trump wins, the severity of trade barriers is anticipated to increase, whereas a Harris presidency is likely to maintain the status quo. Thai industry leaders advocate for proactive measures, including lobbying in trade negotiations and clear policy establishment, to safeguard Thailand’s interests in the evolving global trade environment.
According to Thai News Agency, Mr. Kriangkrai Thienukul, Chairman of the Federation of Thai Industries (FTI), emphasized the global attention on the US presidential election scheduled for November 5th. The election’s outcome is critical, as the policies of the two contenders differ significantly. During Trump’s initial presidency,
his trade war initiated unexpected impacts, including Thailand’s progression from the 14th to the 12th largest trade surplus with the US, despite ongoing tariffs under President Joe Biden. This indicates that Thailand has benefited from the trade war policies of both parties, given their shared stance on viewing China as a primary adversary.
Trade policies under Biden have already increased tariffs on specific imports, like electric vehicles from China, with further taxation anticipated. If Trump is re-elected, he is expected to intensify these measures, potentially increasing tariffs on countries with trade surpluses with the US by 10 to 20%, with China facing an even steeper 60 to 100% hike. This scenario underscores Trump’s commitment to economic nationalism, emphasizing trade balance and security.
Investment policies could also diverge significantly depending on the election outcome. Harris is likely to continue Biden’s approach by increasing corporate tax rates, whereas Trump is expected to focus on do
mestic investment, especially in the technology sector, by reducing corporate taxes by 15%. Similarly, technology restrictions would likely be more stringent under Trump, aiming to limit China’s access to advanced technologies.
Environmental policies present another area of contrast. While Harris and Biden prioritize climate change and renewable energy, Trump is anticipated to support fossil fuel interests, potentially withdrawing from international climate commitments like the Paris Agreement.
The geopolitical landscape also stands to shift. Harris might escalate geopolitical tensions, while Trump has signaled a potential retraction from traditional alliances like NATO, urging allied nations to increase their defense budgets independently. Trump’s approach to Taiwan and the Middle East also suggests a strategic realignment that could de-escalate some conflicts while maintaining a firm stance in others.
For Thailand, the trade war’s repercussions have been both beneficial and challenging. Increased orders
from the US have been a positive outcome, but the influx of Chinese goods into ASEAN, resulting from heightened US tariffs, has negatively impacted Thai industries. The FTI reports that 22 out of 46 industrial groups have been adversely affected by Chinese imports, with an expected increase in affected industries if preventive measures are not urgently implemented.
Moreover, foreign direct investment (FDI) in Thailand has surged, with nearly 2,000 projects seeking investment promotion, marking the highest growth in a decade. However, the influx of Chinese products continues to pose threats to local SMEs, prompting calls for the Thai government to devise strategies to mitigate these impacts and expand market access in the US.
Ultimately, while Southeast Asia, particularly Vietnam, has reaped significant benefits from the trade war, Thailand’s trade deficit with China persists, reflecting untapped potential in capitalizing on the ongoing economic conflict. Mr. Kriangkrai’s insights highlight the urgent need f
or strategic planning to optimize Thailand’s position in the shifting global trade landscape.