Record inflows: Vendors attend to customers at a morning market along a street in Bangkok. If Thailand receives equal tariff treatment, the impact could be mitigated. — AFP
BANGKOK: Thailand’s trade deficit with China has surged to a historic high, with imports soaring during the first four months of 2025 as businesses rush to secure raw materials amid global trade uncertainties, particularly ahead of potential US tariff changes.
According to the Commerce Ministry’s Trade Policy and Strategy Office, Thailand recorded a US$19.23bil trade deficit with China from January to April 2025.
Imports from China totalled US$31.56bil, while exports amounted to US$12.33bil.
In April 2025 alone, Thailand’s imports from China hit a monthly record of US$8.82bil, while exports to China reached US$3.55bil, a 3.2% increase year-on-year.
The resulting monthly trade deficit stood at US$5.27bil.
Among the top five import categories in April were electrical machinery and parts: US$1.67bil (110.6% rise), general machinery and components: US$848.2mil (37.8% rise), home appliances: US$658.6mil (21.6% rise), computers and related parts: US$506.8mil (35.1% rise) and chemicals: US$496.8mil (11% decline).
The surge in imports, particularly of machinery and electronics, reflects businesses stockpiling raw materials and components in anticipation of potential global trade disruptions.
Wisit Limluecha, vice-chairman of the Thai Chamber of Commerce, noted that the spike in imports may be tied to export-oriented manufacturers trying to secure inputs amid concerns over US tariff policy.
With the United States recently imposing global tariffs and initiating a 90-day negotiation window, many countries, including Thailand, are rushing to import raw materials to beat potential cost increases.
This trend is expected to continue through May 2025.
On the export side, Thailand’s shipments to China have been impacted by a drop in fruit exports, attributed to weather-related declines in crop yields.
Looking ahead, the second half of 2025 will be crucial, as the United States finalises its tariff structure.
The United States is Thailand’s largest export market, accounting for 19% of total exports, and any uneven tariff policy could affect Thailand’s competitiveness and disrupt supply chains.
Amonthep Chawla, executive vice-president and head of research at CIMB Thai Bank, cautioned against overly optimistic interpretations of April’s strong export growth – 10% year-on-year.
He noted that much of the increase is due to a low base effect and front loading of orders by trading partners such as the United States.
“Thailand’s persistent trade deficit with China, particularly in electronics and home appliances, remains a structural weakness,” he said.
He added that the rise in exports has not translated into corresponding increases in domestic industrial production or value creation, which could hamper sustainable economic growth.
Some of Thailand’s exports, he noted, are merely pass-through shipments with no local value addition – reflecting weak links between export activity and the domestic agricultural or industrial sectors.
As such, Amonthep projects Thailand’s total exports for 2025 will grow by only 2% to 3%, despite double-digit gains in the first four months.
Additionally, he cited a high comparison base in the latter half of 2024 and slowing global economic momentum as limiting factors.
Furthermore, another growing concern is the rapid appreciation of the Thai baht in late in the second quarter of 2025(2Q25), which could hurt exporters by making Thai goods more expensive on the global market.
This exchange rate risk, coupled with slowing purchase orders, could further challenge Thailand’s export sector in the months ahead.
Thitima Chucherd, director of economic and financial market research at the Economic Intelligence Centre (EIC), Siam Commercial Bank, warned that Thailand’s persistent trade deficit with China is worrying.
She noted that if China successfully concludes trade negotiations with the United States, any indirect benefit to Thailand may diminish.
In April, China’s exports to the United States contracted, but its exports to other markets surged – reflecting China’s rapid market diversification strategy.
Looking ahead, Thailand’s export outlook for the remainder of 2025 – especially the second half – faces significant downside risk. Although April’s 10% export growth exceeded expectations, it largely reflects a temporary acceleration during the United States’ 90-day tariff pause.
A slowdown is expected to follow.
“It all depends on how well Thailand can negotiate with the United States,” Thitima said. “We will begin to see the real impact from July onward, once the tariff freeze ends. This surge in imports during the first four months was just the calm before the storm.”
Previously, EIC forecasted Thai exports to shrink 0.4% in 2025, assuming an average 23% US tariff (down from an initial 36% due to negotiations).
However, there is now a greater likelihood of a larger contraction if the United States imposes steeper or uneven tariffs.
Poonpong noted that 2Q25 exports are expected to maintain momentum, but it remains uncertain whether growth will stay in double digits, depending largely on the outcome of US tariff negotiations.
If Thailand receives equal tariff treatment, the impact could be mitigated.
He added that any revision to the 2% to 3% full-year export target will be considered only after evaluating 2Q25 performance and consulting with the private sector.
Still, the second half of 2025 poses risk, particularly if the United States decides to impose additional tariffs after the 90-day grace period.
The Commerce Ministry has been holding regular meetings with stakeholders to prepare negotiation strategies and relief measures for affected businesses.
Commerce Minister Pichai Naripthaphan expressed confidence that Thailand’s trade negotiations with the United States are progressing well and will conclude within the 90-day timeframe.
He affirmed that current export policies are on the right track, and that Thailand is well-positioned for sustainable long-term growth.
“The continuous export growth reflects the strength of the Thai economy,” said Pichai.
“Despite concerns about US tariffs, Thai exports in April still rose by 10.2%.
“Many had predicted a sharp drop, but the numbers proved otherwise – especially in the US market, where exports grew 23.8% and have now expanded for 19 consecutive months.”
The Commerce Ministry is also working to finalise an EU-Thailand Free Trade Agreement by the end of 2025.
Negotiations will involve meetings with European Trade Commissioner Maros Sefcovic and consultations with the Organisation for Economic Co-operation and Development to accelerate the process.
Such a deal is expected to significantly boost Thailand’s trade competitiveness in European markets. “Exports remain a vital engine of Thailand’s economy.
“Even if exports stagnate over the next eight months, we will still maintain 4% average growth – above previous expectations. If we secure fair tariffs from the United States, Thailand’s global competitiveness will strengthen even further,” Pichai concluded. — The Nation/ANN
