Impact on Thai Export from the US Trade War

 

 

Since the US China trade war kicked off in the middle of last year, Thai business begin to feel the pinch as seen by the downward trend of Thai exports

In the short run, some Thai export items may benefit from trade diversion as US and Chinese importers shifted to certain Thai products to avoid punitive tariffs. However, indirect effect from the trade war on regional supply chains can dampen Thai export sentiment in the long run.

 

The Commerce Ministry reported last week that Thai outbound shipment in February rose 5.9 percent over-year. However, the figure could be misleading. Without the exports of weapons for the military drills with the US which was the one-time factor, Thai exports would have contracted 3.4 percent last month.

The sluggish exports were mainly attributed to lackluster global economic performance, especially the Chinese economy which grew at the slowest pace in 28 years partly because of the trade war with the US.

 

Full story: https://www.thaipbsworld.com/impact-on-thai-export-from-the-us-trade-war/

 

-- © Copyright Thai PBS 2019-03-29

The high value of the baht is the real problem.Was predicted by many months ago.The Government is blaming other countries for their lack of foresight and action

February 4, 2019:

If the MPC [Bank of Thailand’s monetary policy committee] continues to flag concerns about policy space and search for yield, market expectations that the Thai interest rate is on the way up – even as neighbouring countries are lowering theirs – will continue.  http://www.nationmultimedia.com/detail/business/30363467

 

As of now no rate cut by the BoT with the expectation of cuts in 2019 growth and export forecasts.

https://forum.thaivisa.com/topic/1090540-thai-central-bank-holds-key-rate-cuts-2019-growth-export-forecasts/?utm_source=newsletter-20190321-0607&utm_medium=email&utm_campaign=news&_fromLogin=1 

4 hours ago, webfact said:

The sluggish exports were mainly attributed to lackluster global economic performance

So not just lackluster global economic performance but a rigid policy to continue to hold rates to the detriment of exports - a self inflicted economic wound. The next government needs a new BOT Governor.

The Thais just told us not long ago that, like any global events outdide Planet Thailand, they will have no impact. 

 

So, which is it? 

5 hours ago, webfact said:

Impact on Thai Export from the US Trade War

Another factor coming into play behind the scenes are moves to relocate factories from China into neighbouring countries to circumvent the trade war between the US and China. Efforts are now being made to set up trading zones in Vietnam to avoid tariffs.

Despite their wishful thinking Thailand will probably miss out for a number of reasons like economic and sovereign risk, the high baht, higher labour and establishment costs, location and of course the abhorrent Article 44 where companies can be stolen from legitimate owners despite international trade agreements (refer Kingsgate). 

7 hours ago, webfact said:

The Commerce Ministry reported last week that Thai outbound shipment in February rose 5.9 percent over-year. However, the figure could be misleading. Without the exports of weapons for the military drills with the US which was the one-time factor, Thai exports would have contracted 3.4 percent last month.

That explains a lot. Take out the weapons and the exports have been going down for 3 months. Maybe there is still hope of a weaker baht.

Yes....of course, it's the whole worlds fault if Thai exports dwindle and absolutely not the fault of an artificially inflated overrated Thai Bhat that plainly serves the interests of the hi-so's and Thai elites for their personnal investments abroad.

1 hour ago, Cadbury said:

Another factor coming into play behind the scenes are moves to relocate factories from China into neighbouring countries to circumvent the trade war between the US and China. Efforts are now being made to set up trading zones in Vietnam to avoid tariffs.

Despite their wishful thinking Thailand will probably miss out for a number of reasons like economic and sovereign risk, the high baht, higher labour and establishment costs, location and of course the abhorrent Article 44 where companies can be stolen from legitimate owners despite international trade agreements (refer Kingsgate). 

Not to mention the raw steel coming into Lamchabang, being processed and then being exported 

"...exports of weapons for the military drills with the US..."

Got to wonder what Thailand exports that is weapons?

On 3/29/2019 at 4:45 AM, Paul Henry said:

The high value of the baht is the real problem.Was predicted by many months ago.The Government is blaming other countries for their lack of foresight and action

Any excuse will do...but the baht rate is the key. The Government loves pointing fingers, its so much easier than doing any real work to solve a problem.