What To Know
- Thailand’s industrial sector is on red alert as the Federation of Thai Industries (FTI) warns of an impending economic upheaval, sparked by a proposed 36 percent US tariff under Donald Trump’s trade agenda.
- A major thrust is the “Made in Thailand” (MiT) initiative, which calls for mandatory government procurement of local products, double tax benefits for MiT-certified businesses, and year-end bonuses linked to domestic sourcing and job creation.
Bangkok Business News: US Tariff Threat Sends Shockwaves Through Thai Export Sector
Thailand’s industrial sector is on red alert as the Federation of Thai Industries (FTI) warns of an impending economic upheaval, sparked by a proposed 36 percent US tariff under Donald Trump’s trade agenda. FTI Chairman Kriengkrai Thiennukul says the threat represents a crisis “unlike any before,” placing thousands of Thai exporters in peril. The new tariff proposal is prompting frantic discussions among 47 industry groups and 11 manufacturing clusters, all scrambling to understand and cushion the potential damage. This Bangkok Business News report highlights the severity of the situation, with fears mounting that critical export sectors could buckle under the weight of these abrupt changes.
Federation of Thai Industries (FTI) warns of an impending economic upheaval
Image Credit: AI-Generated
Industries considered highly vulnerable include machinery, electrical equipment—which depends on the US for up to 35 percent of sales—as well as rubber, auto parts, steel, leather goods, ceramics, toys, and furniture. While some exporters are negotiating cost-sharing deals with American distributors, many others lack such leeway and are urging the Thai government to lobby for zero-duty access across major product categories.
FTI Pushes Strategic 4 Step Rescue Blueprint
In response, the FTI has proposed a robust four-point rescue plan to avert economic disaster:
1. Urgent Relief for Affected Exporters
Key recommendations include low-interest soft loans, corporate tax breaks, debt moratoriums, and subsidies for logistics, customs, and utilities. A notable highlight is a proposed triple tax deduction for exporters hiring US law firms to navigate legal negotiations.
2. Diversify and Expand Market Reach
The FTI urges rapid negotiation of new free trade agreements, alongside strengthened SME export programmes. A major thrust is the “Made in Thailand” (MiT) initiative, which calls for mandatory government procurement of local products, double tax benefits for MiT-certified businesses, and year-end bonuses linked to domestic sourcing and job creation.
3. Boost Local Content Usage
Beyond current BOI incentives, the FTI advocates additional tax relief for firms sourcing over 90 percent of inputs locally, coupled with support to upgrade productivity.
4. Control Currency Volatility
To maintain global price competitiveness, the FTI is pressing the government to prevent the baht from appreciating beyond regional peers.
A Call for National Unity and Urgency
Kriengkrai delivered a sobering message: “Thailand is now facing the greatest economic crisis in its modern history. But with strong collaboration across all sectors, this crisis could become a turning point—an opportunity to transform and strengthen the country’s economic foundation.” The FTI’s strategy, while ambitious, demands rapid deployment and clear coordination between the public and private sectors.
The challenges ahead are immense, but they also offer a chance for Thailand to reinvent its export strategy, deepen economic resilience, and diversify its trade dependencies before the full brunt of US protectionism hits.
For the latest on the Thai economy, keep on logging to Bangkok Business News.
