What To Know
- With the United States imposing a fresh 19 percent duty on Thai goods and global shipping costs plunging, concerns are mounting that the country’s export-driven economy could face a turbulent end to the year.
- 7 percent in volume and nearly 29 percent in value, with experts warning of a potential 10 percent fall in total shipment volume and a 25 percent drop in export value for the year.
Bangkok Business News: As the final quarter of 2025 looms, Thailand’s exporters are bracing for a sharp downturn, battered by new US tariffs and collapsing freight rates. With the United States imposing a fresh 19 percent duty on Thai goods and global shipping costs plunging, concerns are mounting that the country’s export-driven economy could face a turbulent end to the year.
Thai exporters brace for turbulent months ahead as new US tariffs and falling freight rates threaten growth
Image Credit: AI-Generated
Freight Rates Collapse and Global Demand Weakens
Earlier this year, Thai exports recorded a strong performance, climbing 13 percent in the first eight months to over US$223 billion as many exporters rushed to clear inventories before the reciprocal US tariffs took effect. However, the momentum has faded rapidly. Freight rates on trans-Pacific routes have dropped by more than 30 percent, pulling the cost of shipping a 40-foot container from Asia to the US West Coast down to around $1,400 from over $2,000. And this Bangkok Business News report also finds that routes to the US East Coast have not been spared, with average rates now hovering around $2,400.
Desperate to keep ships full, carriers have begun slashing prices even further, with some offering container space for as low as $1,350. At the same time, approximately 17 percent of scheduled voyages in October have been canceled to control overcapacity. The steep drop in freight rates is widely seen as a red flag, signaling weaker global demand and slower trade activity heading into 2026.
Key Export Sectors Under Pressure
Thailand’s agricultural exports have taken the hardest hit, contracting 6.8 percent during the first eight months of the year. Key products such as rice, processed chicken, canned seafood, and tapioca have all suffered declines. Rubber exports have been particularly weak, sliding 7.7 percent in volume and nearly 29 percent in value, with experts warning of a potential 10 percent fall in total shipment volume and a 25 percent drop in export value for the year.
Still, some industries remain resilient. The electronics sector continues to expand, with export growth projected at roughly 30 percent this year thanks to steady demand for components. Meanwhile, Thailand’s automotive industry is showing remarkable stability, with Toyota Motor Thailand forecasting production of about 537,000 units and exports of 336,000 units—only a minor 1 percent decline compared to last year.
Global Trade Risks Intensify
The global trade environment is adding to Thailand’s woes. The World Trade Organization had earlier forecast a 2.4 percent growth in world trade for 2025, but that figure could fall to as low as 1.5 to 1.9 percent if the United States moves ahead with plans to impose a 100 percent tariff on Chinese goods from November 1. Analysts warn that such a move could trigger a major shift in global supply chains, with China redirecting exports toward Southeast Asia, increasing competitive pressure on Thai manufacturers.
Economists estimate Thailand’s trade deficit with China could widen from 1.6 trillion baht to nearly 2 trillion baht as Chinese products flood regional markets. However, there may be a silver lining—Thai producers of vehicles, electrical appliances, and processed foods could seize new opportunities as Western importers seek alternatives to Chinese goods.
Thailand’s Export Future Hangs in the Balance
With falling freight rates, rising costs, global trade tensions, and sluggish demand, Thailand’s exporters face one of their toughest years in recent memory. The path forward will depend on how quickly businesses can adapt to shifting trade routes, diversify export markets, and strengthen competitiveness in high-value manufacturing.
If the current downward trends persist into 2026, the country’s trade-dependent economy could face renewed strain. However, targeted government support and innovation in logistics, technology, and product diversification could help soften the blow and keep Thailand’s export sector afloat.
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