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US tariffs on China judged to support Thai export growth
The latest round of US tariff hikes on an additional US$200 billion (6.49 trillion baht) worth of Chinese goods is expected to help Thai exports, offering opportunities to replace the Chinese products in the US market, according to a Commerce Ministry study.
Pimchanok Vonkorpon, director-general of the Trade Policy and Strategy Office under the Commerce Ministry, said the higher US tariffs on 5,745 Chinese products give Thailand the potential to export more replacement goods.
She said promising Thai exports include dried nuts and cashews; smoked rubber sheet and rubber block; coloured rice; fresh and processed fruits and vegetables such as bananas, coconuts, mangos and pineapples; frozen and processed seafood such as tuna; and animal products like natural honey.
Other potential segments are seasonings and beverages, non-alcoholic drinks, chemicals and plastic pellets, and automotive and parts.
“As far as the office has evaluated, the high-potential products to replace Chinese products in the US market are coloured rice, rubber block, coconuts, guavas, mangos, mangosteens, natural honey, citric acid and internal combustion engines,” Ms Pimchanok said.
US President Donald Trump kicked the trade war with China into high gear on Monday, formally announcing the imposition of tariffs on $200 billion worth of Chinese goods.
The tariffs cover a wide array of goods, from minerals used in manufacturing to vegetable juices and leather handbags. Chinese imports to the US will face a 10% duty effective from Sept 24 until the start of 2019, when the tariffs will jump to 25%.
While the Trump administration is downplaying the effect of the tariffs, many economists expect prices for the goods to increase once the tariffs are officially imposed on Sept 24.
The new list of goods that will be subject to the tariffs is notably different from the previous round of tariffs on $50 billion worth of Chinese goods, as there are consumer products on the list.
There were 297 items removed from the United States Trade Representative’s initial list, released in July, after the public comment period.
Even with the removals, 5,745 full or partial tariff lines are included on the final list, representing roughly $200 billion worth of Chinese imports.
Ms Pimchanok said China is also expected to soon introduce retaliatory measures against the US’s latest round of tariff hikes, which the office will closely watch and evaluate for impact on Thai exports.
She said the trade row between the two giant economies is unlikely to end soon and is instead apt to become more intense and complex.
Ms Pimchanok said Thailand should focus on expanding trade partnerships and national security, which are closely linked to trade policies.
Siam Commercial Bank’s Economic Intelligence Unit said in a report that the negative effect from the US-China trade row on Thai exports remains limited.
The report said the trade war between the two economies may render an indirect positive effect on Thailand from the relocation of certain manufacturing bases in the two countries to Thailand.
The SCB’s research house said that with growth in global economy and trade, overall Thai exports are expected to be on course for growth of 8.5% this year.
Source: https://www.bangkokpost.com/business/news/1543158/us-tariffs-on-china-judged-to-support-thai-export-growth