Bangkok: The US is intensifying its trade measures against China by closing transit routes for Chinese goods through third countries, a move that could significantly impact Thailand. The US government's focus, under President Donald Trump, is to block the entry of Chinese goods into the US market through third-country transshipment, a strategy labeled as "The Great Transshipment Scam."

According to Thai News Agency, the White House's Office of Trade and Manufacturing Policy (OTMP) has highlighted the issue of Chinese goods being transited through third countries, which may involve minor manufacturing processes or alterations to avoid US tariffs. Dr. Peter Navarro, a key figure in the Trump administration's trade policy and director of the OTMP, has been a vocal critic of China's trade practices, emphasizing the need to address this loophole.

The trade tensions between the US and China have resulted in the 'Great Reallocation', where direct US imports from China have decreased, and imports from other Asian countries, including Thailand, have increased. This shift has prompted Chinese businesses to relocate or expand production in these countries to access the US market.

The US government is now focusing on goods that may only undergo minimal processing in a third country before being shipped to the US, viewing this as a loophole in tariff avoidance. The White House report identifies over 40 countries involved in these transit routes, with Southeast Asian nations like Thailand under increased scrutiny.

Assoc. Prof. Dr. Sompop Manarangsarn has analyzed the potential impacts on Thailand, highlighting the country's links to China's production chain and its significant exports to the US. The key issue is verifying the origin of goods and the extent of domestic processing versus reliance on Chinese raw materials.

The Bank of Thailand has indicated that some Thai exports to the US, such as electrical appliances, machinery, and electronics, might be at risk of transshipment issues. Thai businesses may need to enhance scrutiny of their supply chains and origin documentation to avoid tariffs and penalties under US regulations.

For Thailand, this trade shift represents a direct risk to exporters, necessitating close monitoring of developments. The Thai government is preparing to verify the origin of goods using advanced systems to alleviate US concerns and confirm genuine investment in manufacturing bases, not just transit points.

The ongoing confrontation between the US and China is unlikely to subside, and for Thailand, it underscores the need for businesses to adapt to the evolving trade landscape.