What To Know
- A recent study by the Trade Policy and Strategy Office (TPSO) highlights that a staggering 1,149 items are now entering the Thai market from China—of these, 24 are deemed high-risk and 166 are under watch, particularly in the automotive and consumer goods sectors.
- In the midst of this influx this Bangkok Business News report reveals that the surge follows the US imposition of a 19 percent reciprocal tariff in late July, which in turn has spurred trade diversion.
Bangkok Business News: Thailand is witnessing a dramatic surge in imports from China, prompting urgent scrutiny from the Ministry of Commerce. A recent study by the Trade Policy and Strategy Office (TPSO) highlights that a staggering 1,149 items are now entering the Thai market from China—of these, 24 are deemed high-risk and 166 are under watch, particularly in the automotive and consumer goods sectors.
Chinese imports flood Thai markets raising risks for local industries
Image Credit: AI-Generated
In the midst of this influx this Bangkok Business News report reveals that the surge follows the US imposition of a 19 percent reciprocal tariff in late July, which in turn has spurred trade diversion. Higher tariffs on China, Taiwan, Vietnam, and India have created pressure points that channel alternative supply routes, with Thailand now standing directly in the path of diverted goods.
Unpacking the reasons behind the flood of imports
Deputy Director Natiya Suchinda of TPSO warns that China now represents the highest trade-diversion risk. Several factors are driving this shift:
-A widening tariff gap of 15 percent between Chinese goods and Thai-produced alternatives
-Chinese overcapacity, subsidies, and the ripple effects of the US–China trade war
-Established supply chain ties and the ease of trade under the ASEAN-China Free Trade Agreement
What’s at stake for Thailand’s economy
The Spill-over Index, a barometer of Chinese goods’ penetration, rose from 100 in 2018 to a peak of 130 in 2024. This reflects the escalating scale of Chinese product flows into Thailand.
While the influx can benefit consumers with more options and lower prices, there’s a looming downside: domestic manufacturers, especially small and medium enterprises, may be squeezed out, facing job losses, shrinking capacity, and growing trade imbalance.
The TPSO study introduced a risk-alert system, evaluating products by market share of Chinese imports, growth in import value, and price gaps against global benchmarks. The results showed that 904 items were classified as low-risk, 38 as requiring moderate surveillance, 24 as high-risk, 17 as moderately high-risk, and 166 under surveillance.
High-risk items include capital goods and industrial products, which simultaneously boost efficiency and expose Thailand to vulnerabilities like price swings, policy shifts, or supply chain shocks. Consumer products such as alcohol, cabbages, clothing, and plastic furniture also stand out as direct threats to local producers.
Strategies on the table to manage the influx
To counter these risks, TPSO recommends crafting both short-term interventions, such as tariff adjustments and temporary safeguards, and long-term reforms aimed at boosting domestic competitiveness, diversifying imports, and strengthening enforcement. Proactive measures are essential to preserve domestic industry resilience while navigating the delicate balance between consumer benefit and local protections.
Thailand now stands at a crossroads: embrace broader consumer choice and cost efficiency, or shield nascent domestic industries from being overwhelmed by low-cost Chinese imports. The path ahead demands smart policy balance and agile responses to safeguard Thai economic sovereignty while welcoming global trade benefits.
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