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As the new trade war between China and the us escalates, Thailand's export growth is likely to hit its lowest level in four years, at 0.5-1 per cent.
Thailand also needs to be alert to the risks posed by an influx of Chinese goods, warns a researcher at the university's center for international trade studies.
Nye an, director of the center for international trade studies at the university of the Thai chamber of commerce, said that after the us announced 25 percent tariffs on us $200 billion worth of Chinese goods, the Chinese side immediately took countermeasures by imposing 25 percent, 20 percent or 10 percent tariffs on some of the us $60 billion list of goods that had already been hit by tariffs.
The 5 per cent tariff will continue to be imposed on items previously subject to 5 per cent tariff.
Naian believes that Thailand, which is caught in the middle, is the most hurt after the new trade war between China and the United States escalates.
As the most important export trading partner of Thailand, China is bound to reduce import demand under the new tariff policy of the United States, which will also increase export pressure.
Under such circumstances, Thailand's export-oriented economy will face greater pressure.
Thailand's exports are expected to grow by only 0.5-1% in 2019.
With the Chinese government encouraging exports, Thailand will face greater pressure from the influx of Chinese exports.
The trade war between China and the United States will have different negative impacts on neighboring countries.
The center had earlier forecast full-year growth of 3.3-3.5 percent, up from 3 percent at best.
More worrying is the performance of Thailand's exports. If all the factors are taken into consideration, the pessimistic situation may be that Thailand's exports growth rate is only 0.5-1% for the whole year.
That would also mark a four-year low for Thai exports.
All this, of course, depends on whether a breakthrough can be achieved in the ensuing talks between China and the us.
The United States also plans to impose tariffs on $300 billion worth of Chinese goods.
That would not only affect the Thai economy, but could even derail global trade.
At the regular cabinet meeting today, prime minister prayuth chan-ocha also asked all departments to carry out risk studies on the impact of the new china-u.s. tariff and trade policy on the Thai economy and formulate countermeasures.