Bangkok: Assoc. Prof. Dr. Anusorn Thamjai, Dean of the Faculty of Economics at the University of the Thai Chamber of Commerce, has revealed that the United States' decision to impose a 50% tariff on imported goods from the European Union starting June 1, 2025, could have significant implications for the global trade system and the economies of both regions. The US-EU trade, valued at nearly 1 trillion dollars annually, could be severely impacted by this development.
According to Thai News Agency, the potential trade disruptions present both risks and opportunities for Thai exports. If the EU faces increased tariffs from the US and subsequently retaliates, Thailand may be able to capture a greater market share from the EU in specific product categories. As EU goods become more expensive in the US market, Thai exports of processed food, clothing, and furniture could potentially fill the gap. Moreover, should the EU reduce its reliance on US products, Thailand might find new opportunities in sectors such as agricultural products, food, electronics, automotive parts, and electrical appliances.
Dr. Anusorn highlighted the possibility of production base relocation, suggesting that EU or foreign companies might consider moving their operations to Thailand to circumvent US tariffs. This scenario underscores the importance for Thailand to expedite a Free Trade Agreement (FTA) with the EU to further expand its market presence.
The current trade tensions also have implications for currency valuations. Dr. Anusorn indicated that the trade war could lead to a weakening of the US dollar as the country attempts to adjust its trade balance and reduce its deficit. This situation may cause the Thai baht to strengthen to 31-32 baht per dollar. Despite the slowing Thai economy, short-term foreign investment inflows have begun, with investors net-buying Thai stocks and bonds, adding pressure for the baht to appreciate.