ttb analytics points out that "Thailand" is ranked 2nd in ASEAN, facing the impact of Trump 2.0 policy.
ttb analytics points out that "Thailand" is ranked 2nd in ASEAN, facing the impact of Trump 2.0 policy, may be pressured to open the market to import more agricultural products in exchange for easing trade barriers.
January 23, 2568 Economic Analysis Center TTB (ttb analytics) It is assessed that Thailand is at risk of being targeted by US trade barriers under the Trump 2.0 policy, ranked second in ASEAN, due to the US being at a disadvantage in trade with Thailand in many dimensions, such as Thailand's high trade surplus, cost advantages from the depreciation of the baht, and the number of AD and CVD measures in many product categories being higher than its competitors.
In particular, the collection of import tariffs on Thai agricultural products at a relatively high rate compared to other trading partners, which may be used as a bargaining chip by the United States in considering a new round of import tariffs, putting Thailand at risk of pressure to open up its market for additional imports of important agricultural products, such as meat and animal organs, soybeans, and animal feed corn.
Pointing out that "Thailand" may be targeted by the United States after having the second highest trade advantage in ASEAN
Since the first wave of the trade war (Trump 1.0) in 2561, ASEAN has become a region worth watching. It has benefited from China using ASEAN as a base to change trade routes, including moving production bases for exports to the United States more. As a result, many countries' trade surpluses with the United States have increased by 1-2 times compared to before the trade war in 2560, especially Vietnam, which has a trade surplus with the United States of more than 1 billion US dollars in 2566, or an increase of almost 3 times.
For 2568, the upcoming new trade war under the second term of the same US leader, Donald Trump (Trump 2 policy), is expected to create another round of turmoil in global financial and trade markets.
Trump is committed to pushing the US economy in every dimension, whether it be amending laws to promote competition, reducing personal and corporate taxes, tackling illegal labor problems, and stimulating investment in the country's core industries.
And importantly, the announcement of trade barriers by setting up import tariffs on Chinese goods of 60-100% compared to the first wave of the trade war, where the average import tariff from China was 21.5%. There is also a plan to increase import tariffs on goods from other countries by another 10-20% from the original average import tariff of only 3%.
ttb analytics sees that the fact that Trump has not yet sent a clear signal about import tariffs at his inauguration as US President on January 20, 2568, is partly because the US is in the process of appointing the United States Trade Representative (USTR), but it also reflects Trump's stance on trade measures. Trump 2.0 will be completely different from Trump 1.0.
That is, Trump's policy of raising import tariffs on all countries during the US presidential election campaign was intended to pave the way for specific trade negotiations on a country-by-country and product-by-product basis (Bilateral Agreement), compared to the Trump 1.0 policy, which was primarily aimed at reducing the trade deficit with China (since the US had the largest trade deficit with China at that time (4.2)).
The intensity of the trade negotiation framework under the Trump 2.0 policy towards US trading partners will vary according to the trade advantages with the US, as assessed by ttb analytics from 5 main areas:
1) Level of trade surplus with the United States (Bilateral Trade Surplus)
2) Cost advantage from exchange rate adjusted against the US dollar (Exchange Rate Adjusted Cost Advantage)
3) The difference in import tariff rates between the United States and its destination trading partners in the agricultural product group (MFN Tariff Excess on Agricultural Products)
4) The difference in import tariff rates between the United States and its destination trading partners on non-agricultural products (MFN Tariff Excess on Non-agricultural Products)
5) The level of protection of the US domestic industry through the number of orders related to anti-dumping (AD) and countervailing duty (CVD) measures reported by the US International Trade Commission (US.
International Trade Commission : USITC)
ttb analytics assesses that Thailand is likely to be targeted by US trade policies under Trump 2.0, ranking second among ASEAN countries after Vietnam, because the US is at a disadvantage in trade with Thailand in many dimensions, including Thailand's high and significantly increasing trade surplus, cost advantages from the recent depreciation of the baht, and a higher number of AD and CVD measures in many product categories (e.g. steel and metals, solar panels, and chemicals) than its peers.
This includes the collection of import tariffs on Thai agricultural products at a relatively high rate compared to other trading partners. In addition, the United States is Thailand's number 1 trading partner, with an export value of up to 4.8 billion US dollars, or 17% of the total export value, accounting for more than 9.4% of Thailand's GDP. Therefore, raising import tariffs of up to 20% in this round will have a huge impact on Thailand's export sector, which will make it easier for the United States to demand trade benefits with Thailand.
The United States is expected to pressure Thailand to open more agricultural markets.
In the past, Thailand was the 16th most important agricultural export trading partner of the United States out of more than 200 trading partners, with an export value of approximately 1.8 billion US dollars in 2560. However, the current agricultural export value is only 1.2 billion US dollars, or an average annual decrease of 6.8%, causing Thailand's ranking as a major trading partner in the agricultural product category to drop to 25th place.
Although part of the reason is that more US companies are setting up agricultural production plants in Thailand, it is also because Thailand has mechanisms to protect the agricultural sector, which is the heart of domestic industries.
The Ministry of Commerce has set import control measures that are still in effect today for 23 items, such as milk, cream and flavored milk drinks, vegetables and fruits, animal feed corn, rice, soybeans, palm oil, coconut oil, coffee and tobacco (which are under the supervision of the Ministry of Finance).
Under scrutiny from the US over its high import tariffs and quota restrictions on agricultural products is nothing new for Thailand. For example, in November 2563, Trump signed a second repeal of Generalized System of Preferences (GSP) for 2 Thai products worth US$231 million.
The reason given was that Thailand had unfairly opened the market for pork products and goods (the US had first revoked Thailand's GSP privileges in April 2563 due to Thailand's failure to protect international labor rights in the fishing industry).
The USITC also pointed out that Thailand has a lack of transparency in its management of in- and out-of-quota tariffs, arbitrary import licensing controls, and food standards that do not comply with international standards.
In addition, Thailand has a relatively high average agricultural import tariff rate of 42% compared to other types of import tariffs, especially in the category of unprocessed food products such as dairy products, meat, fresh vegetables and fruits, which causes the United States to pay the highest import tariff rate of 216% compared to other countries with which Thailand has international trade agreements that reduce the import tariff rate of most agricultural products to 0%, resulting in a relatively high import tariff rate for agricultural products from the United States.
It is expected that the United States may pressure Thailand to open more markets for importing important agricultural products to negotiate with the increase in import tariffs on products from Thailand in other groups. Over the past several years, the United States has tried to negotiate with Thailand and other trading partners to import various agricultural products.
Including pressure through the elimination of trade privileges, calls for changes to the World Trade Organization's trade rules, which is expected to affect Thailand's stance on importing various agricultural products, such as meat and animal organs, soybeans, and animal feed corn.
Ultimately, ttb analytics believes that Thailand may need to ease some trade measures with the US to help alleviate the impact of this import tariff hike.
In summary, amidst the high level of uncertainty in global trade rules, Thai entrepreneurs should diversify their risks by expanding their market channels to the ASEAN region, especially agricultural and processed agricultural products, which are products that Thailand has high production and export potential. In addition, Thailand has FTA trade privileges with ASEAN, which will help create a competitive advantage for Thai agricultural products in the global market.
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