Thailand's US$35bn deficit: 73% is for production

Thailand recorded a trade deficit of US$35.3545 billion in the first seven months of 2026, according to the Commerce Ministry. However, Deputy Prime Minister and Commerce Minister Suphajee Suthumpun said more than 70% of imports were materials and capital goods used in production.

Machinery, electronic components and chemicals accounted for a combined 72.9% of all imports during the period, she said. Consumer goods made up only 9.2%.

The ministry argues that the headline deficit should not be viewed simply as excessive consumer spending or a need to cut imports. Instead, it says the focus should be on ensuring trade and foreign investment create more value within Thailand.

Production imports drive the deficit

Suphajee said the import pattern reflected growing global manufacturing activity, particularly in technology, electronics, digital infrastructure, communications and electricity systems. Thailand is part of these international production supply chains.

When consumer products are considered separately - excluding goods linked to manufacturing, exports, military equipment and energy - Thailand posted a trade surplus of US$13.3156 billion.

More local content and SME involvement

The ministry has been instructed to pursue a trade-balancing policy based on "mutual benefit" with partner countries. The aim is not to make import and export values identical on paper, but to generate greater returns for the Thai economy from trade and investment.

In countries that invest heavily in Thailand, the government will seek more use of local materials, components and labour. It also wants Thai businesses, particularly SMEs, to take a bigger role in supply chains.

Thailand will seek to reinforce its position as a trusted partner on quality, standards and supply-chain security. The ministry's "Co-Creation" approach aims to move beyond selling products to partners towards jointly developing goods, industries, business opportunities and markets - described as a shift from "Sell To" to "Sell With".

China and UAE proposals

In discussions with China, Thailand has proposed reviewing investment models to increase the use of Thai materials. It has also suggested jointly developing new industries, including processed food and herbal products, for Chinese and third-country markets, while bringing Thai SMEs onto Chinese e-commerce platforms.

With the United Arab Emirates, Thailand remains in deficit because of energy imports. It is nevertheless pursuing free-trade agreement negotiations alongside joint development of new businesses intended to build a longer-term relationship.

Suphajee said the ministry's goal was not merely to reduce the deficit, but to use strategic ties with partners to improve Thailand's competitiveness, create domestic value and give Thai firms a greater supply-chain role. She said sustainable growth should deliver shared benefits for Thailand and its trading partners.

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2 September 2026

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