Thailand Weighs Imports of More US Goods to Cut Trade Surplus

Thailand, a key trading partner and ally of the United States, is considering increasing its imports of US goods to help reduce its trade surplus with the country. The Federation of Thai Industries (FTI) has called for thorough preparations to address potential trade challenges resulting from the US’s policy changes, including the establishment of a “war room” of skilled lobbyists to help navigate US trade policies and mitigate their impact on exports, and the diversification of export markets to reduce reliance on the US.

The Thai Industry Sentiment Index (TISI) fell to 90.1 in December last year from 91.4 in November, reflecting concerns over several factors, including reduced manufacturing due to long holidays, the ongoing flood crisis in the South, and rising prices of agricultural goods that have negatively affected food processing industries. The FTI has made several recommendations for government action, including support measures for small- and medium-sized enterprises affected by the minimum wage increases, the introduction of energy conservation initiatives, the acceleration of negotiations on trade agreements – especially with the European Union – and the development of comprehensive strategies to effectively respond to US trade policies.

Thailand is an important trading partner and ally of the United States, dating back to the establishment of diplomatic ties in 1833 through the Treaty of Amity and Commerce. The United States and Thailand meet regularly under the auspices of their 2002 bilateral Trade and Investment Framework Agreement (TIFA) to address outstanding bilateral issues and coordinate on bilateral, regional, and multilateral issues. The latest information regarding significant trade barriers can be found in the 2021 National Trade Estimate Report.

Thailand’s trade surplus stood at USD 0.22 billion in June 2024, compared with a tiny gain of USD 0.06 billion in the same month of the previous year. It marked the second straight month of trade surplus despite falling short of market expectations of a 0.6 billion gain. Exports unexpectedly fell 0.3% from a year earlier to USD 24.80 billion, the first drop in three months, missing forecasts of a 2.6% growth while reversing from a 7.2% rise in May. In the meantime, purchases grew by 0.3% to USD 24.58 billion, the fifth time of growth year to date but below forecasts of a 3.0% gain. In the first half of 2024, the trade balance posted a deficit of USD 5.24 billion, with exports (2.0%) rising less than imports (3.0%).



Thailand posted a trade surplus of USD 0.66 billion in May 2024, shifting from a deficit of USD 1.53 billion in the same month of 2023. It marked the first trade surplus since last December, as exports grew while imports fell. Exports rose 7.2% from a year earlier to a 14-month high of USD 26.22 billion, accelerating from a 6.8% rise in April, mainly boosted by agricultural and industrial products. Meanwhile, purchases dropped 1.7% to USD 25.56 billion, reversing from an 8.3% jump in the prior month. In the first five months of 2024, the trade balance registered a deficit of USD 5.46 billion, with exports and imports advancing by 2.6% and 3.5%, respectively.



Thailand’s trade deficit increased to USD 1.64 billion in April 2024 from USD 1.47 billion in the same month of 2023. It marked the fourth straight month of deficit in trade gap and the largest since January as exports rose less than imports grew. Exports grew by 6.8% from a year earlier to USD 23.28 billion, recovering sharply from a 10.9% plunge in March, mainly boosted by agro-industrial products and industrial products. Meanwhile, purchases rose 8.3% to USD 24.92 billion, accelerating from a 5.6% growth in the prior month.

In conclusion, Thailand is considering increasing its imports of US goods to help reduce its trade surplus with the country. The Federation of Thai Industries has called for thorough preparations to address potential trade challenges resulting from the US’s policy changes, including the establishment of a “war room” of skilled lobbyists to help navigate US trade policies and mitigate their impact on exports, and the diversification of export markets to reduce reliance on the US. Thailand’s trade surplus stood at USD 0.22 billion in June 2024, compared with a tiny gain of USD 0.06 billion in the same month of the previous year. The Thai Industry Sentiment Index (TISI) fell to 90.1 in December last year from 91.4 in November, reflecting concerns over several factors, including reduced manufacturing due to long holidays, the ongoing flood crisis in the South, and rising prices of agricultural goods that have negatively affected food processing industries. The FTI has made several recommendations for government action, including support measures for small- and medium-sized enterprises affected by the minimum wage increases, the introduction of energy conservation initiatives, the acceleration of negotiations on trade agreements – especially with the European Union – and the development of comprehensive strategies to effectively respond to US trade policies.