Tariffs likely if Trump wins, warn experts

The business and academic sectors can foresee scenarios in which the result of the upcoming United States presidential election between Democratic candidate Kamala Harris and Republican candidate Donald Trump could create both risks and opportunities for Thailand.
Sanan Angubolkul, chairman of the Thai Chamber of Commerce, said changes in United States’ trade policies, investment flows, and environmental commitments will also impact the Thai economy, which is closely linked to global politics.
Fluctuations in the Thai baht and stock market often occur around US elections, as investors worry that American policies will affect global markets, he said.
He noted that in this environment, Thailand’s government and business sectors must adapt strategically to mitigate risks stemming from US policies and seize potential opportunities coming with changes, such as strengthening ties within the Southeast Asian region and promoting domestic industries.
The Thai Chamber of Commerce has outlined two possible scenarios:
Such policies could impact the energy and shipping industries, potentially increasing inflation and affecting Thai exports. A 10% global import tariff from the US would also reduce demand for Thai goods.
Furthermore, tariffs of up to 60% on Chinese products might redirect Chinese exports toward Southeast Asia, flooding local markets with cheaper goods and challenging Thai manufacturers.
In the second scenario, if Ms Harris wins the election, her administration would likely continue the Biden-era policies, supporting international trade and clean energy investments.
This could boost Thai exports to the US and provide opportunities for Thai businesses in clean energy and infrastructure projects.
Despite the uncertainties, Mr Sanan emphasised the importance of maintaining strong Thai-US relations.
Regardless of the election outcome, he expressed confidence that Thailand can adapt to ensure the US remains a key trading partner and ally in the future.
The Federation of Thai Industries (FTI) believes that Thailand is likely to bear the impact of US trade barriers and benefit from more foreign direct investment if trade wars intensify, said Kriengkrai Thiennukul, FTI Chairman.
If former president Donald Trump is reelected, countries that export products to the US, including Thailand, may impose significant tariffs on many products.
“We are closely monitoring whether America will place tariffs on more products from Thailand, which has a trade surplus with the US,” he said, adding Thailand had a trade surplus of around US$20 billion with the US in 2020.
The value later increased by 11%, making Thailand the 12th-largest current account surplus holder with the US this year.
During the Trump administration, the US-China trade war erupted as the former president placed high tariffs on Chinese products in response to a years-long trade deficit with China. Mr Trump announced that the US would not easily accept trade deficits with other countries either, said Mr Kriengkrai.
According to the Council on Foreign Relations, a New York-based think tank, Mr Trump wants to “impose a ‘universal’ tariff on most imports while matching higher tariffs imposed by other countries”.
If US Vice President Harris succeeds President Joe Biden, the US trade barriers, which have also been implemented since the Biden government, will continue but should not be as severe as those to be imposed by Mr Trump, said Mr Kriengkrai.
He believes Ms Harris will consider placing tariffs on certain products. Though trade wars may affect Thai exports, they can be a factor in increasing foreign investment in Thailand.
The US-China trade war is expected to intensify if Mr Trump governs the country. This may lead to the expansion of businesses into Asean countries, including Thailand, said Mr Kriengkrai.
The Indo-Pacific region remains a strategic area for the United States to leverage its power against China and Russia no matter who becomes the next US president, said Asst Prof Akekalak Chaipumee, a lecturer from the Department of Political Science and Public Administration at Kasetsart University’s Faculty of Social Sciences.
“The country will continue its mission of being a great power, competing with China and Russia. At the same time, both candidates share the same priority — ‘America First’ — though at different levels,” he noted.
He said if Mr Trump becomes the next president, US multilateralism will decline. In addition, the Republican Party demands that China’s Most Favored Nation status be revoked, that imports of necessities be phased out, and that China refrain from purchasing American enterprises and real estate in order to “secure strategic independence from China”.
If Ms Harris wins, US foreign policy will likely remain consistent with the Biden administration’s approach, he said.
As for Thailand, he said the nation always positions itself as “a friend to all nations” by seeking engagement with various international frameworks, such as Brics, an intergovernmental organisation comprising Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates, and the Organisation for Economic Co-operation and Development (OECD).
Thailand also needs to see if its foreign policies need to be revised after the US election.
Anekchai Rueangrattanakorn, Silpakorn University’s adjunct lecturer in Political Science, said the result of the US election will affect Thailand as the nation may need to take sides or face certain constraints when Thailand engages with certain countries that the US has conflicts with.
He said Mr Trump adopts unilateralism and overlooks multilateralism, including alliances with other regions, while Ms Harris highly emphasises diplomacy, negotiation, and cooperation and strongly emphasises multilateralism.
He furthered that the US foreign policies will continuously affect geopolitics, especially in balancing China’s power. The US is one of the Southeast Asian allies that have invested a lot in the region and developed solid military relations.
Ms Harris’s foreign policies seem to support Southeast Asia’s stability more than Mr Trump’s, he said, adding the Thai government needs to consider the potential trade war that may occur because there might be a 10% tariff wall erected against any imports into the US.
Thailand needs to maintain its stance in not participating in international conflicts, consider national interests as a core and become an active promoter of peace and shared prosperity in the region, according to Mr Anekchai.
“The government should continue adopting active diplomacy and economic policy and harness soft power to support trade, investment and tourism, especially in the emerging markets. Additionally, the government should think about selecting a suitable strategy for foreign policy, particularly when Thailand wants to have a leadership role in solving some issues occurring in Southeast Asia,” he added.
Thailand needs to strengthen relations with the US regardless of the future president, said Panitan Wattanayagorn, an academic in security and international relations.
He advised proactive engagement with both US candidates to secure favourable relations regardless of the election outcome, stressing that early diplomatic efforts could benefit Thailand in the long run.
He suggested that a victory for Mr Trump could bring clearer strategies, especially toward the Russia-Ukraine conflict, as he might pursue peace negotiations.
However, Mr Panitan noted that a long-term conflict between the US and Russia remains likely due to China’s support for Russia, along with US conflicts with China. At the same time, Mr Trump’s relations with North Korea might boost the chances of his victory.
In addition, Mr Panitan said that the approaches of both parties to Middle Eastern and Asian conflicts might not differ significantly. However, tensions with China, particularly around trade, will likely remain intense under either administration.
In the Middle East, he predicted prolonged US involvement due to its alignment with Israel against Iran. With a proposed defence budget of US$800-900 billion, the US would be positioned to counter Iran directly, yet Israel remains a key partner until then.
Regarding Asia, Mr Panitan noted that Mr Trump could potentially negotiate with Chinese President Xi Jinping while also supporting Taiwan’s defence, adding that the US currently does not have sufficient military power while there is a necessity to deal with China seriously, making his relations with the Philippines a key factor that could win him votes.
Ms Harris, on the other hand, would likely focus more on Myanmar’s internal conflict, with the possibility that she would negotiate with Thailand for access to the region to deal with the matter, he said.
Mr Panitan speculated that Ms Harris might struggle with public support due to her current unclear policies, compared to Mr Trump’s decisive style, which might resonate with Americans amid rising inflation and economic concerns.