UTCC: Thai export sector to be affected by US-China trade war
BANGKOK, (NNT) - Thailand’s export sector is believed to be affected by trade war between the United States and China. The director of the University of Thai Chamber of Commerce’s International Trade Study Center has forecast that Thailand’s export growth will drop from 3.2-4.6% to 2.2-4.6%.
The food category is forecast to be either positively or negatively affected. The Thai export goods to China which will drop include rubber, rubber products, plastic pellet products and chemical products and those which will rise include fresh and processed fruits, drinks, cleansing products and animal feed.
The Thai export goods to the United States which will drop include computers, clothes and accessories, machinery and those which will rise include fresh and processed fruits, automotive parts, rubber and rubber products and furniture items.
It remains to be seen if China might devalue the yuan by 20-25% to make up for increased import tariffs which have caused a decline in the prices of Chinese products many of which might flow into Thailand and ASEAN countries and might lead to the relocation of more manufacturing bases to the CLMV region.
Thailand has been advised to step up trade barrier measures and the new government is advised to promptly engage in Free Trade Area negotiations with Europe to prevent adverse effects on Thai export sector whereas markets of Brazil, Russia, India and South Africa are yet to be expanded, given a high-quality, low-price trade strategy.
Besides, Free Trad Area dealings between Vietnam and Europe which will be effective in this year’s third quarter will affect Thai export goods bound for Europe from 2019 to 2021, thus rendering a total export value to drop by an average of 0.8% per year. It is forecast to drop by 21.52 billion baht in the second half of this year and by 38.60 billion baht in the next two years. The most affected goods include clothes, machinery and accessories and electrical appliances and accessories.
Thailand’s export growth is expected to drop to 0.5-1%, a record low in four years. If the United States charged an additional 300 billion dollars in import tariffs for Chinese goods as planned, the Thai export growth would drop to 0.5% throughout this year.
Phimchanok Wornkhorphorn, director of the Ministry of Commerce’s Trade Policy and Strategy Office, said the United States’ trade measures against Chinese goods account for an estimated 200 billion dollars in import tariffs might cause a drop in a total value of Thai export goods by 5.6 -6.7 billion dollars.
However, several Thai export goods are yet satisfactory such as farm goods, foods, fruits, beverages, chicken and cosmetic products. Though most are of a relatively small value, they could raise psychological confidence of farmers and SME operators. Export goods which will considerably drop in value include electronic products and automobiles, prompting the Ministry of Commerce to summon commercial attaches at Thai embassies worldwide for talk by the end of May.
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