Bangkok: Economists fear that the decision to reduce import tariffs to 0% on goods from the United States could lead to a more than 100% increase in agricultural products, significantly affecting domestic producers. Unemployment is not considered a crisis yet, but there are rising concerns over increasing layoffs and the need to accelerate the development of labor skills and attract investment.
According to Thai News Agency, Assoc. Prof. Dr. Anusorn Thamjai, Dean of the Faculty of Economics at the University of the Thai Chamber of Commerce, stated that reducing import tariffs to 0% on US goods could result in a reduction of US retaliatory tariffs. This would align them more closely with those of ASEAN countries like Vietnam, Indonesia, and Malaysia, potentially lessening the severity of the current 36% trade retaliatory tariffs on Thai exports. Product groups heavily reliant on the US market contribute 13-14% to Thailand's GDP.
Dr. Anusorn highlighted that if Thailand fails to reduce tariffs from 36%, it could result in a loss of hundreds of billions of baht in Thai exports over the long term. However, this market opening to the US might pose challenges for the domestic production sector, which could struggle to adapt and compete, affecting the labor market. There is a concern that US agricultural products might surge by over 100%, further impacting domestic producers who are already battling dumping from China.
He mentioned that the overall impact of Trump's tariffs on the Thai labor market remains limited, with potential employment crises restricted to sectors like electrical appliances, electronics, construction, accommodation, and food services. According to Labor Warning data from the Ministry of Labor, there is a 25.51% chance of an employment crisis in the next four quarters.
Despite a normal unemployment rate of 84.09% among former private employees and a 5.35% risk of an unemployment crisis, the Ministry of Labor's first-quarter data showed 39.38 million employed persons, including 16.08 million private employees. The unemployment rate was 0.9%, with 357,731 unemployed individuals. The slowdown in the export, manufacturing, and investment sectors is expected to increase the overall unemployment rate for the rest of the year. Low-interest loans aimed at promoting employment might alleviate some issues.
Dr. Anusorn emphasized the importance of accelerating labor skills development and attracting investment. According to the OECD, ADB, and BOI reports compiled by the DEIIT Research Center, the Thai labor system faces several limitations, such as a mismatch between skills and market demands, outdated training systems, and a lack of international skills certification. Only 6% of the workforce holds international standard certifications, and the country lacks a robust labor market intelligence system, complicating efforts to proactively promote labor skills.