Thailand is strategically eyeing an expansion in its exports of pet food, rice, and processed food products to the US amidst the ongoing trade tensions between China and the US. The Southeast Asian nation aims to capitalize on the tariff barriers that have restricted Chinese exporters from accessing the lucrative US market. Thailand is particularly looking to enhance its market presence in key segments such as dog and cat food, rice, and processed mackerel, where it already holds a prominent position as a supplier to the US.
Poonpong Naiyanapakorn, the director general of Thailand’s Trade Policy and Strategy Office, emphasized the country’s plans to substitute Chinese products like noodles, frozen seafood, soy sauce, and bamboo shoots with Thai offerings. However, Thailand is not without challenges, as it faces a significant 36% tariff on its food products and the potential risk of Chinese goods being rerouted through other countries with lower US tariffs. To navigate these uncertainties arising from the US-China trade tensions, the Thai government is implementing short- and long-term strategies to safeguard its market share.
The impact of the trade conflict on Thailand’s economy has been substantial, with the International Monetary Fund revising down the country’s growth forecast for the year. The absence of scheduled trade negotiations with the US adds further pressure. Prime Minister Paetongtarn Shinawatra’s administration is wary of the repercussions of elevated tariffs on its primary export market, which could potentially dent economic growth by a significant margin if left unresolved.
To address concerns raised by the US regarding potential circumvention of tariffs through Thailand, the prime minister has instructed officials to tighten the criteria for issuing certificates of origin. Additionally, Thailand is exploring avenues to enhance imports of US commodities like corn, natural gas, and ethane, while also considering tariff reductions and the removal of non-tariff barriers to facilitate a trade agreement with the US.
In 2024, Thailand witnessed a notable surge in its exports to the US, with figures more than doubling from the beginning of President Donald Trump’s tenure. Agricultural exports to the US alone amounted to US$4.8 billion in the previous year, reflecting the country’s growing presence in the American market. However, sustaining this momentum is challenging, given the substantial 36% tariff that Thai products face.
As Thailand braces for a potential influx of Chinese goods that could undercut local businesses, there are concerns about the impact on sectors such as agriculture. China may redirect its exports of agricultural products like garlic, dried chili, green tea, and preserved vegetables towards Thailand, posing both challenges and opportunities for the domestic market. The evolving trade dynamics necessitate a proactive approach from Thailand to navigate the shifting landscape of global trade.
