U.S. tariffs and global trade shifts have significantly hampered Thailand’s export growth, as trade dynamics in key markets like China and Switzerland undergo drastic changes. The imposition of higher tariffs on Thai goods by the U.S. has not only made exports more expensive but has also prompted businesses to seek alternative suppliers, reducing Thailand’s competitiveness. Meanwhile, the reorientation of global trade routes and shifting alliances have disrupted longstanding export relationships, especially with China, a major trading partner. Switzerland, another crucial market, has been affected by the changing international landscape, as Thailand faces new challenges in maintaining its market share amid these global trade realignments. These factors collectively contribute to a slowdown in Thailand’s export performance, demonstrating the far-reaching effects of international trade policies.
In August 2025, Thailand’s export value reached USD 27,743.19 million, reflecting a year-on-year (YoY) growth of 5.8%. While this shows positive growth, it represents a significant slowdown from the 11.0% growth rate recorded in July and fell short of market expectations. The data, when seasonally adjusted, revealed a slight month-on-month contraction, continuing a trend of decline that started in July. This deceleration in exports has raised concerns about the future outlook for Thailand’s trade performance, especially as external factors continue to shape global markets.
Despite the slowing growth rate, the main drivers of Thailand’s export performance in August were the strong demand for electronics and precious metals. Electronics exports, particularly to the United States, played a pivotal role in supporting the overall export numbers. The category saw continued strength in product categories such as computers, electrical components, and other related goods. In addition, Thailand benefited from significant gold exports to countries like Switzerland and to ASEAN nations. Gold has long been a staple of Thailand’s export portfolio, and its steady demand helped balance the decline in other sectors. However, these positive contributions were somewhat dampened by the introduction of phased U.S. import tariffs starting on August 7. These tariffs, designed to address trade imbalances, placed a strain on export growth, particularly in electronics, a major export category for Thailand. The tariffs, which are layered with reciprocal, specific, and special duties under Section 232 of U.S. trade policy, have complicated trade dynamics for Thai exporters. Despite these challenges, the electronics sector remained relatively resilient, as demand for high-tech products continued to be strong in key markets.
On the import side, Thailand saw a notable surge in imports during August, which reached USD 29,707.6 million, marking a significant 15.8% increase compared to the same month the previous year. This exceeded the expectations of analysts and signaled a shift toward increased demand for various imported goods. The growth in imports was broad-based, with capital goods, consumer products, raw materials, and vehicle-related items showing notable increases. Specifically, imports of capital goods from China were a major contributor to this surge, reflecting Thailand’s continued investments in infrastructure and industrial expansion. Additionally, consumer goods and raw materials, including precious metals such as gold, saw strong demand, driven by both domestic consumption and industrial needs. Vehicles and vehicle-related components also made up a substantial portion of the increase in imports, in line with rising demand in the automotive and transport sectors.
The sharp increase in imports, however, led to a trade deficit of USD 1.96 billion in August, marking a reversal from the trade surplus Thailand had enjoyed in the previous three months. This shift into a trade deficit is a cause for concern, as it suggests that the country is importing more than it is exporting, a trend that can affect the overall balance of payments and the strength of the national currency. The trade deficit was driven not only by the surge in imports but also by shifts in the structure of trade flows. Significant increases in imports of precious stones, jewelry, and electrical circuit boards, particularly from markets such as the United States and Taiwan, played a substantial role in the widening deficit. This rise in imports suggests both a strong domestic demand for high-end goods and the complexity of global supply chains, which have become increasingly intricate in recent years. The trade deficit could pose additional challenges for Thailand’s economic stability, especially if the trend continues in the coming months.
Looking ahead, the outlook for Thai exports remains clouded with risks, particularly due to the evolving trade relations with major partners. One of the key factors influencing Thailand’s export future is the continued imposition of U.S. reciprocal tariffs. The U.S. has been adopting a more protectionist stance in recent years, and the tariff system it has put in place includes layers of tariffs under Section 232, which are intended to address trade imbalances. These tariffs include reciprocal duties, which can affect up to 35% of Thailand’s exports to the U.S., with some products facing additional specific tariffs. This creates an environment of uncertainty for Thai exporters, particularly in the electronics sector, which is among the most vulnerable to these tariff measures. The complex tariff structure further exacerbates the risks, as the effective rate can exceed the negotiated 19% rate, adding pressure to businesses that rely heavily on U.S. exports.
Advertisement
In addition to the tariff risks, there are other factors that could impact Thailand’s export performance in the near term. One of these is the appreciation of the Thai baht, which can make Thai exports more expensive and less competitive in international markets. A stronger currency tends to reduce the price advantage that exporters may have enjoyed, and this could further strain the already weakened export growth. Furthermore, the base effect, where the previous year’s strong exports create a high comparison point, may also contribute to slower growth in the months ahead. These challenges are compounded by geopolitical tensions and the potential for further changes in international trade policies. As nations around the world continue to grapple with economic instability and shifting alliances, Thai exporters could face additional barriers, including trade restrictions and supply chain disruptions.
U.S. tariffs and shifting global trade dynamics have severely slowed Thailand’s export growth, with key markets like China and Switzerland feeling the impact. The tariffs have increased costs and reduced Thailand’s competitiveness, while changes in global trade relationships have disrupted established trade channels.
while Thailand’s export sector showed positive growth in August 2025, the momentum has slowed considerably, and the future remains uncertain. The impact of U.S. tariffs, rising domestic demand reflected in the growing import figures, and external economic factors all point to a challenging period ahead for Thai exporters. While some sectors, like electronics, continue to show resilience, the risks associated with shifting global trade dynamics, geopolitical tensions, and currency fluctuations will likely create significant hurdles in the latter part of the year. With these challenges in mind, Thai exporters will need to adapt quickly to maintain competitiveness and mitigate the impact of external economic pressures.
Advertisement
Share On:
Follow Travel And Tour World in Google News
