Impact of U.S. Auto Tariffs on Thailand’s Auto Parts Exports

Thailand’s auto parts exports face challenges due to new U.S. tariffs. Finance Minister Pichai Chunhavajira seeks negotiations for direct shipments to the U.S. Key industry leaders believe the immediate impact will be limited. Further tariffs may be introduced, but their effects are yet to be determined.

Thailand’s Finance Minister stated that newly introduced U.S. tariffs on auto parts are expected to have a negative impact on the country’s exports. He emphasized a desire to negotiate terms allowing for direct shipping of parts to the U.S., instead of sending them through manufacturers in third countries. This negotiation is aimed at mitigating potential export declines resulting from the tariffs.

As the largest auto production center in Southeast Asia, Thailand serves as an export hub for notable automakers like Toyota and Honda. Recently, President Donald Trump announced a 25 percent tariff on imported vehicles, escalating a global trade conflict and eliciting backlash from international allies.

The finance minister, Pichai Chunhavajira, noted that these tariffs would likely diminish the volume of auto parts exported to other nations manufacturing vehicles. He stated, “We’ll have to see how much it will affect us,” expressing hope that Thailand could successfully negotiate to send parts to the U.S. directly, acknowledging that realignment of production facilities would be time-consuming.

In a related comment, Yeap Swee Chuan, CEO of AAPICO Hitech, one of Thailand’s major auto parts producers, suggested that the immediate impact of the tariffs would be minimal, as a majority of their production is geared towards local Japanese companies, with limited dealings in the U.S. market. The tariffs could complicate the direct shipments of parts there.

Regarding additional exports potentially facing tariffs which Trump plans to unveil next week, Pichai mentioned that any impacts might not be immediate, urging caution while the effects are assessed. He indicated that Thailand’s large trade surplus with the U.S. raises concerns about facing further tariffs.

The U.S. tariffs on auto parts are set to impact Thailand’s exports, prompting Finance Minister Pichai Chunhavajira to seek negotiation for direct shipments to the U.S. The overall effects of these tariffs, while concerning, are currently viewed as manageable by key industry figures like Yeap Swee Chuan of AAPICO Hitech. Future tariffs remain a point of contention, and Thailand is closely monitoring the situation.

Original Source: www.channelnewsasia.com