Thailand should shift its attention from celebrating rising export figures to prioritising the trade balance, analysing it country-by-country, says the Thai National Shippers' Council (TNSC).
Chaichan Charoensuk, chairman of TNSC, said the ongoing trade war is like a time bomb for exporters, with the true impact likely to become evident in the second quarter.
The council projects modest shipment growth of 1-3% this year, reaching a value of US$305 billion, up from $301 billion in 2024. However, looming uncertainties such as the potential impacts of US President Donald Trump's import tariffs raise serious concerns for Thai exports, he said.
In the first quarter, exports are expected to increase 7-8%, with the value averaging $25 billion per month, despite the new US tariffs imposed on imports from Canada, Mexico and China. Exports shot up in anticipation of the intensifying trade war, said Mr Chaichan.
He said the second quarter will be a critical period as the effects of the Trump tariffs will become increasingly evident.
This situation could directly and indirectly affect Thailand, as steel and aluminium are essential materials for manufacturing electronics, home appliances, automobiles and construction materials, said Mr Chaichan.
He expressed concern about the indirect impact of these tariffs. As Canada and Mexico grapple with increased tariffs, they may redirect their exports to other nations rather than the US, causing disturbances in the supply chain and potentially triggering a commodities price war, said Mr Chaichan.
Thailand enjoys a trade surplus with the US totalling $35 billion, but faces a trade deficit of $45 billion with China, leading to an unfavourable trade balance, he said.
"It is crucial for Thailand to prioritise the trade balance with individual countries. Exporters are not happy with positive export figures in the first quarter as underlying structural issues in Thailand's export landscape persist," said Mr Chaichan.
He said Thailand faces several significant challenges, including an increase in foreign direct investment that improves the trade balance, but involves minimal local content. Potential US tax measures on Thai exports could worsen the trade balance, affecting businesses across the supply chain, said Mr Chaichan.
A surplus of Chinese goods is being redirected to Southeast Asian nations because of the tariffs, creating price competition and possibly harming small businesses, while increasing Thailand's trade deficit with China. He said limited access to soft loans, outdated manufacturing, insufficient investment in R&D, a shortage of skilled labour in tech-driven industries, and lack of a unified industrial policy all hinder growth.
The council recommends exporters diversify into alternative markets and talk with importers and trade ambassadors, as well as leverage existing economic cooperation frameworks and fully utilise free trade agreements.
