Bangkok: Ekkanat Promphan, Thailand’s Minister of Industry, has stirred discussion by posting on Facebook that ‘Dump’ is scarier than ‘Trump’, suggesting that managing the zero-dollar industry is crucial to coping with tax increases. Promphan recommended measures such as saving Thai industries, preventing market dumping, encouraging Thai people to use domestic products, and supporting SMEs.
According to Thai News Agency, Promphan’s comments are timely as Thailand braces for a 36% tax that the US plans to impose on August 1st. The US, Thailand’s largest export market, accounts for over 54 billion USD in annual exports. Negotiations to reduce the tax remain uncertain, with examples of previous attempts, such as Vietnam’s, resulting in unexpected outcomes.
The US tax increase will affect various sectors differently. For instance, automotive parts will face a 25% tariff, while steel imports will be taxed at 50%. However, some electronic components, like hard disks, will benefit from a 0% import duty. This exemption is significant, covering approximately 20 billion USD of Thailand’s exports.
For the remaining 34 billion USD subject to tariffs, there are concerns about the impact on US competitiveness if raw materials, parts, or machinery used in production are taxed. This could potentially lead to production base relocations outside the US, prompting a reconsideration of the tax measures.
Among the 24 billion USD worth of finished goods exports from Thailand, products like rubber products, air conditioners, and jewelry are at risk. However, the local content in some sectors is minimal, reducing the net export value. Promphan emphasizes the need to tackle zero-dollar industries and prevent market dumping to protect Thai industries and the economy.
Promphan advocates for supporting Thai-made products and SMEs, reducing bureaucratic obstacles, and promoting technology and innovation. Integrating the supply chain and driving industrial reform are seen as opportunities to strengthen Thailand’s economy in a rapidly changing global landscape.