Impact of U.S. Auto Tariffs on Thai Auto Parts Exports

Thailand’s Finance Minister warns that U.S. tariffs on auto parts will impact exports. The country aims to negotiate direct shipments to the U.S. while industry leaders view the overall impact as limited. Concerns remain about additional tariffs due to Thailand’s trade surplus with the U.S.

The Thai Finance Minister has indicated that United States tariffs on auto parts are projected to negatively influence Thailand’s exports in this sector. He expressed optimism about negotiating direct shipments of auto parts to the U.S., bypassing intermediaries in other nations.

As Southeast Asia’s primary automotive production hub, Thailand serves as an export base for renowned manufacturers such as Toyota and Honda. Recently, U.S. President Donald Trump enacted a 25 percent tariff on imported vehicles, escalating global trade tensions and provoking backlash from U.S. allies.

According to Finance Minister Pichai Chunhavajira, these tariffs could diminish Thailand’s auto parts exports to countries engaged in vehicle manufacturing. He remarked on the uncertainty surrounding the full impact, emphasizing the necessity of discussions to facilitate direct shipment of parts to the United States.

Yeap Swee Chuan, the chief executive of AAPICO Hitech, one of Thailand’s leading auto parts producers, downplayed the effect of the tariffs, mentioning that most components are supplied to Japanese firms domestically. He highlighted that only a minimal fraction of AAPICO’s production is sent directly to the U.S., suggesting that tariff impositions would complicate those shipments.

Regarding potential additional tariffs announced by President Trump, Finance Minister Pichai noted their immediate effects on various exports are not yet clear. He stated, “We still have time to see which ones will be affected and how we will negotiate. Let’s wait and see.” There is ongoing concern in Thailand regarding the likelihood of U.S. tariffs because of the significant trade surplus the nation holds with the United States.

In summary, Thailand’s auto parts exports may experience adverse effects due to new U.S. tariffs. The Finance Minister is hopeful for negotiations to facilitate direct shipments to the U.S., while industry leaders suggest manageable impacts for local producers. The potential for further tariffs adds uncertainty, yet officials expressed a readiness to assess and respond to these developments as they unfold.

Original Source: www.channelnewsasia.com