THE US-CHINA trade war that has led to tariffs skyrocketing might soon turn into an economic storm for Thai people if Chinese products flood the market which could then lead to Thai SMEs being squeezed to the point of shutting down, Thai Rath newspaper said today (Apr. 17).
China raised its duties on imports of US goods to 125% from 84%, while US tariffs on Chinese imports have ballooned to “a 125% reciprocal tariff, a 20% tariff to address the fentanyl crisis, and Section 301 tariffs on specific goods, between 7.5% and 100%,” according to Yahoo!Finance.
If the US tariff wall against Chinese goods remains or rises there is a greater tendency of Chinese products flooding Thailand with this leading to Thai SMEs that are unable to compete against cheap goods from the Mainland being squeezed to the point of shutting down and workers losing their jobs.
An analysis by Land and Houses Bank shows that Chinese products account for approximately 26.3% of Thailand’s total import value.
Over the past few years the value of Chinese products have significantly increased from US$50.27 billion in 2019 to US$80.608 billion in 2024, equivalent to a jump of more than 1.6 times or an average increase of almost 10%.
The top 10 products imported from China have continuously increased, especially electrical machinery and mechanical components, chemicals, electrical circuit boards, metal ores and scrap metal, and plastic products.
The top five imports from China during 2019-24 are as follows:
(1) Electrical machinery and components;
(2) Machinery and components;
(3) Home appliances;
(4) Chemicals;
(5) Computers, equipment and components.
Amid steep tariff hikes China tends to turn to sell its products to other markets, especially Asean, which is a neighboring zone where there is a demand for cheap goods.
Products likely to flood into the Thai market including electrical appliances and components, such as refrigerators, washing machines and air-conditioners, computers and components, automobile and parts, machinery and components, petrochemicals, such as plastic pellets, as well as steel and aluminum products.
The influx of Chinese products into domestic and Asean markets will intensify competition with manufacturers having compete on price to maintain market share,
The Federation of Thai Industries (FTI) has warned that the flood of Chinese products will reduce the market share of Thai products, especially consumer goods, and pressure Thai SMEs’ ability to compete.
This is because overall Chinese products are 20-40% cheaper than what is produced in Thailand as China has cost advantage and production technology. FTI’s executives are concerned that once Thai SMEs lose their competitive edge it could lead to some industries reducing their production capacity or closing down.
There is also concern about smuggling low-quality products and those infringing copyright both through customs checkpoints and online platforms. Also importing products to re-export by adding only a small amount of domestic materials.
The possible jump in trade deficit would affect the overall economy.
Moreover, Thais are warned that those who buy “cheap things” today may not have money to buy them tomorrow, even if they are still cheap, because if Thai factories cannot compete they would shut down and start laying off employees.
CAPTIONS:
Top: Made in China goods. Photo: Thai Rath
Front Page: Made in China labels are shown on products in Carmel, Ind., on Wednesday, April 9, 2025. Photo: AP/ Michael Conroy and published by Dallas Morning News
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