US Tariff Threatens to Cut Thai Exports by 275 Billion Baht, Study Finds
Analysis projects exports to shrink by 275bn baht in 2026, yet sees Thailand gaining a trade advantage over key competitors
- A study by the University of the Thai Chamber of Commerce (UTCC) warns a 19% US tariff could cut Thai exports by 275 billion baht in 2026.
- This projected loss in exports is expected to reduce Thailand's GDP by 1.48% for that year.
- The Thai exports identified as most vulnerable to the tariff include electrical equipment, machinery, metals, processed foods, and vehicles.
The University of the Thai Chamber of Commerce (UTCC) has warned that a 19% US customs tariff could slash Thai exports by 275.069 billion baht in 2026, trimming the country's GDP by 1.48% for the year.
According to Thanawat Polwichai, president and chief advisor for the UTCC's Center for Economic and Business Forecasting, the immediate impact for the remaining five months of 2025 is estimated to be a 114.612 billion baht reduction in exports, which would lead to a 0.62% drop in GDP for the year.
Speaking on Tuesday, Thanawat noted that while the 19% tariff is a significant challenge, Thailand's position is not entirely disadvantageous compared to its rivals.
He explained that the tariff is a negotiation point, with the US aiming for a 0% rate while imposing varying import taxes on other nations.
A competitive analysis by the UTCC reveals that Thailand is at a disadvantage compared to Singapore, which faces a 10% tariff, and Japan and South Korea, which are both at 15%.
However, Thailand holds a clear advantage over Vietnam and Taiwan (20% tariff), India (25%), and China (51%).
The study identified the Thai exports most vulnerable to the new tariff as electrical and electronic equipment, machinery and components, metals, processed foods, and vehicles.
Conversely, products where Thailand gains a competitive edge against its rivals include smartphones, footwear, industrial machinery, gems, chemicals, and furniture.
The UTCC's analysis breaks down the impact into three parts: a direct reduction in exports to the US, an indirect effect through global supply chains, and a potential benefit from trade diversion.
For 2026, the full-year figures project a direct export loss of 255.643 billion baht and an indirect loss of 64.747 billion baht. However, the report estimates a potential gain of 45.322 billion baht from trade diversion.
Despite these headwinds, the UTCC's overall economic outlook remains optimistic.
Thanawat highlighted that the global impact of the US tariffs is not expected to be severe, with the IMF's global GDP growth forecast for 2025 and 2026 remaining relatively stable.
He added that Thailand's export slowdown should not be drastic, with a strong tourism sector projected to attract 34 million visitors this year.
The UTCC is maintaining its full-year GDP growth forecast at 1.5-2%, with a central estimate of 1.7%.
To mitigate the negative effects of the tariffs, the UTCC has urged the government to implement six key policy measures:
- Provide assistance to affected industries.
- Strengthen rules of origin regulations.
- Diversify export markets.
- Attract high-value direct investment.
- Promote domestic demand.
- Pursue proactive trade diplomacy.
