Thailand-Cambodia rift deepens, dragging trade into prolonged slump

Thailand has closed all border checkpoints with Cambodia, except for humanitarian purposes, citing escalating border tensions and security threats. Despite a ceasefire agreement reached on July 28, cross-border trade remains stalled as the situation has yet to fully stabilise.

Land freight has plunged to zero, while sea shipments have slowed. Cambodia is actively campaigning to reduce its reliance on Thai goods, further eroding market confidence.

Aat Pisanwanich, an independent scholar and expert in international and ASEAN economics, told Thansettakij that based on 2024 figures, Thai exports to Cambodia were worth 324.13 billion baht, averaging about 27 billion baht per month.

With land borders completely shut, Thailand is expected to lose around 162 billion baht in exports during the second half of this year (July–December). After accounting for sea shipments, which account for 25% of exports to Cambodia, the net loss could reach about 120 billion baht.

Warning of 10-year, 2.4-trillion-baht loss

“If trade conditions do not return to normal soon and the situation drags on for 10 years, Thailand could lose approximately 2.43 trillion baht in land exports to Cambodia, assuming all border crossings remain closed,” Aat warned.

“However, if both sides can reach a mutually acceptable solution and resume border trade, even if the situation is not exactly the same as before, the actual losses may fall short of this estimate.”

Still, with all crossings effectively shut, Cambodia continuing its ‘no Thai goods’ campaign, increasing imports from countries such as China and Vietnam, and banning four key Thai products—oil, gas, vegetables and fruit—Aat believes border trade could remain depressed for up to a decade, with no return to previous levels.

He added that beyond security arrangements along the border, long-standing disputes over territory, claims of ownership of ancient sites, as well as cultural and traditional heritage issues, will continue to fuel mutual resentment among the peoples of both nations.

Hardest blow to Thailand-Cambodia ties in 75 years

Voratat Tantimongkolsuk, president of the Thailand-Cambodia Business Council, said businesses on both sides are hoping upcoming forums—including the Regional Border Committee (RBC) and the General Border Committee (GBC)—will produce an agreement to fully reopen border checkpoints.

Since June 23, Thai-Cambodian border crossings have faced heavy restrictions. Although some crossings remain open, the movement of people, goods and vehicles is restricted., sharply reducing import-export volumes.

Data from the Department of Foreign Trade shows that cross-border trade in June fell to 10.90 billion baht, down 23% year-on-year. Thai exports to Cambodia dropped 24% to 8.96 billion baht. Disruption to land transport has forced Thai businesses to shift to more costly sea shipments, reducing export volumes.

Voratat urged the government to assist and compensate affected Thai businesses—particularly in the seven provinces bordering Cambodia—through financial aid, liquidity support, tax deductions, and help in finding new markets.

“This is the most severe impact since Thailand and Cambodia established diplomatic relations 75 years ago.  For example, in 2011, Thai-Cambodian trade was worth 86.6 billion baht, compared to 367.23 billion baht in 2024. The stakes are much higher today,” he said.

Five key border points lose 11bn baht per month

Thanavath Phonvichai, president of the Economic and Business Forecasting Centre at the University of the Thai Chamber of Commerce, said the closure of five major checkpoints—Aranyaprathet, Khlong Yai, Chong Chom, Chanthaburi and Chong Sangam—has cost the Thai economy about 11 billion baht per month.

If the closures continue until year-end, losses could exceed 55 billion baht.

The five checkpoints normally handle the bulk of land trade between the two countries. Following the dispute, traders have shifted to sea and air routes, which could partially offset losses.

Most Cambodian imports from Thailand are essential consumer goods, which are cheaper and more convenient than alternatives from Vietnam. Thai imports from Cambodia are mostly industrial raw materials, particularly agricultural products—small in volume but vital to local industries.

According to the Economic and Business Forecasting Centre, the full closure of these five checkpoints is costing Thailand an estimated 11.65 billion baht in lost exports per month, or around 141.84 billion baht annually.

Aranyaprathet border hit hardest

Breaking down the impact of the full closure of Thai-Cambodian customs checkpoints, Aranyaprathet has suffered losses of 7.10 billion baht per month, or 86.48 billion baht per year. Khlong Yai’s losses amount to 2.17 billion baht per month, or 26.40 billion baht per year; Chanthaburi 2.05 billion baht per month, or 24.97 billion baht per year; Chong Chom 240 million baht per month, or 2.91 billion baht per year; and Chong Sangam 88 million baht per month, or 1.07 billion baht per year.

If all checkpoints remain closed for the rest of 2025, the estimated impact on Thailand’s GDP this year would be about 0.31%, equivalent to 69.95 billion baht. However, if the conflict can be resolved and border trade restored within three months, the GDP impact in 2025 could be limited to 0.13%, or 34.97 billion baht.

Supply chains disrupted

If Thailand is unable to export to Cambodia, three major sectors would be hit:

• Food and beverages – 32.74 billion baht in export value lost
• Vehicles and parts – 18.57 billion baht lost
• Chemicals and fertilisers – 15.30 billion baht lost

Together, these categories would account for 66.61 billion baht in losses.

For imports from Cambodia, the three main categories affected would be:

• Metals and scrap – 8.18 billion baht in import value lost
• Cassava – 7.28 billion baht lost
• Metal products – 4.91 billion baht lost

Combined, these categories would represent 20.39 billion baht in losses.

Full border closure erodes trust

Mongkol Chulthat, senior president of the Ubon Ratchathani Chamber of Commerce, described the current situation as an act of war, unlikely to end or stabilise in the short term. Many fear prolonged impacts, particularly economic, which are already being felt beyond Ubon Ratchathani’s border areas and across other provinces and regions.

Daily spending by residents has slowed, and bank customers are seeking debt moratoriums to keep cash on hand for essentials. Life, he said, may never return to normal. 

With trade zones restricted, border checkpoints fully closed, and nationalist sentiment souring Thai-Cambodian relations, trust has vanished and the two countries have effectively become adversaries. He estimated it could take 10–15 years to restore relations.

Prakob Chaisongkram, owner of retail and wholesale business Yongsanguan Ubon, said the conflict’s impact, especially in the lower Northeast border provinces and Ubon Ratchathani, has caused trade to stagnate, spurred evacuations, and driven retail sales to their lowest point in three years. 

He expects the downturn to continue until at least the end of 2025.