Thai CEOs Unveil Survival Strategies as Trump Tariffs Threaten Economic Growth
Banking chiefs and airline executives outline defensive measures as 19% US tariffs loom over Thailand's export-dependent economy
- The banking sector is adopting defensive strategies such as prudent risk management and cost reduction, while urging businesses to diversify into new export markets through potential free trade agreements.
- Thai Airways is reducing its reliance on domestic tourism by focusing on a "Network Strategy" that leverages airline partnerships to create multiple revenue streams from connecting flights.
- Financial institutions are strengthening their internal resilience with robust operational frameworks and adequate provisions to support affected clients, similar to measures used during the COVID-19 crisis.
- A key overarching strategy across sectors is diversification, with companies seeking new markets, developing alternative revenue streams, and using international networks to mitigate risks from the tariffs.
Thai business leaders are bracing for economic turbulence as new US tariff policies threaten to disrupt the kingdom's export-driven economy, which relies on foreign revenue for more than 50% of its GDP.
Following the clarity on US customs tariff rates after 1st August 2025, corporate executives across key sectors have outlined comprehensive strategies to weather the anticipated economic storm whilst maintaining operational resilience.
Banking Sector Fortifies Against Triple Threat
Kris Chantanotoke, Chief Executive of Siam Commercial Bank (SCB), identified three major challenges facing Thailand's economy: Trump's tariff policies, economic deceleration, and household debt approaching 70% growth.
"Thai banks must adapt and assist customers across all sectors," Kris said, outlining a three-pronged defensive strategy for the banking industry.
The approach includes prudent risk management to avoid excessive exposure, focusing on core competencies where each bank excels, and continuous cost reduction. SCB has successfully maintained its cost-to-income ratio at 36.8% in the first quarter whilst preserving a return on equity of 11.7%.
For the second half of the year, SCB plans to pursue growth in three main areas: large-scale lending, wealth management including insurance, and fee-based services. The bank targets 25% digital revenue whilst implementing an 80:20 project management principle.
Chongrak Rattanapian, Managing Director of Kasikornbank (KBANK), acknowledged that Trump's tariffs create pressure on trade and investment, potentially leading to supply chain expansion within Thailand, production base relocation, and impacts on domestic employment and household purchasing power.
"Entrepreneurs urgently need to seek new markets, particularly if Thailand successfully concludes FTA agreements with the EU and Canada, which would help diversify risks and increase export channels," Chongrak said.
Aviation Industry Pivots to Network Strategy
Thai Airways Chief Executive Chai Eamsiri revealed the national carrier's strategy to reduce dependence on domestic tourism, which fluctuates with economic conditions.
"Thai Airways is developing multiple revenue streams beyond direct routes and new route expansion, emphasising connecting sales or Network Strategy through airline partnerships," Chai explained.
The airline faces challenges managing fuel costs, which represent 30% of operational expenses.
Whilst negotiations for fuel hedging contracts are underway, Thai Airways cannot yet execute these due to lack of credit lines following its recent emergence from business rehabilitation.
Nok Air CEO Wutthiphum Jurangkool remains optimistic about high-demand markets including India, Vietnam, and China.
The budget carrier plans route expansion during the winter schedule beginning in October, focusing on potential markets and promoting domestic routes to create connecting travel to tourist destinations.
Financial Institutions Strengthen Crisis Preparedness
Smaller banks are also implementing defensive measures. Thai Credit Bank CEO Roy Augustinus Gunara outlined a two-pronged strategy: supporting customers through crisis periods similar to COVID-19 assistance, and maintaining institutional strength through robust financial and operational frameworks.
"Banks must have capability to accommodate these risks in advance, such as maintaining adequate provisions under government supervision to avoid impacting the bank's financial position," Gunara said.
Land and Houses Bank CEO Shih Jing-Fuh noted that only 10% of the bank's portfolio faces direct impact from trade wars, as most customers are not heavily export-dependent. The bank continues providing financial assistance and debt restructuring for affected clients.
HSBC Thailand CEO Giorgio Gamba emphasised the bank's role as a "super-connector," leveraging its presence across 20 countries to help clients diversify risks and create enhanced investment opportunities.
Tourism Sector Monitors Indirect Effects
Thai Hotels Association President Thienprasit Chaiyapatranun said Thailand's tourism sector hasn't experienced direct impact from US retaliatory tariffs, but uncertainty remains over future energy costs as Thailand imports some oil from the United States.
"Import tariffs could affect the US tourism sector itself, with fewer people likely to visit America due to higher import costs raising living expenses," Theinprasit observed. "This could ultimately impact American purchasing power and potentially lead to inflation, requiring further corrective measures."
Despite the challenges, Thailand's business leaders express confidence in their preparedness for the new economic reality, emphasising diversification, operational efficiency, and strategic partnerships as key survival tools in an increasingly uncertain global trade environment.
