Greater investment in the flagship Eastern Economic Corridor (EEC) is likely as foreign investors give Thailand a fresh look after US President Donald Trump revealed US$60 billion (1.87 trillion baht) in new tariffs on China, according to the Thai Chamber of Commerce.
Buntoon Wongseelachote, vice-chairman for foreign trade negotiations at the chamber, said that once China is snarled in trade disputes with the US, many manufacturers may beef up investment in Thailand, where the government has been heavily promoting the EEC initiative to draw foreign investment.
"Foreign investors may see Thailand as becoming more interesting for investment," Mr Buntoon said. "Meanwhile, Vietnam, Malaysia, Singapore and Brunei will no longer have much competitive edge over Thailand once the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in which they are members comes in without the US."
But he acknowledged that given the key supply chain through China, Thailand will inevitably be affected, if indirectly, by the US's latest tariffs.
In the light of the new tariffs, Mr Buntoon said China may import fewer parts, particularly for electronics, most of which belong to US firms investing in Thailand and China.
Sompop Manarungsan, president of the Panyapiwat Institute of Management, said Thai exports are also in jeopardy from trade retaliations by the two giant economies, as the repercussions will eventually hit the world's overall supply chain.
"Thailand's high expectation for export growth of 8% is hardly achievable because of the titans' clash," Mr Sompop said. "Thailand should instead speed up efforts to look for ways to boost exports to other markets and stimulate domestic purchasing power."
Mr Sompop predicted further and tighter measures introduced by Mr Trump to raise his popularity at home and improve the US's export capability.
The president fired the latest shots against China on Thursday by announcing $60 billion worth of further tariffs on China, raising fears of a trade war between the world's two biggest economies.
Deputy Commerce Minister Chutima Bunyapraphasara said yesterday that the ministry ordered the Trade Policy and Strategy Office to evaluate the impact and gather information to pursue talks with the US in the event that Thai products are affected by the US's protectionist measures.
But Ms Chutima said Thai exports are unlikely to be hit directly, as the US has targeted China over intellectual property theft, an issue that Thailand has tackled with vigour.
The US late last year moved Thailand from its Priority Watch List (PWL) for intellectual property to its Watch List (WL) for an out-of-cycle review. Thailand was on the PWL for 10 years.
Last year, Thailand's exports to China totalled $33.86 billion, up 42.3%. Shipments to China represented 12.4% of Thailand's total export value.
For the first two months of this year, Thailand fetched $4.71 billion from shipments to China, up 6.4% from the same period last year.
Kasikorn Securities (KS) views Thailand's electronics sector as being at the greatest risk.
Among the top 15 export products from Thailand to China, integrated circuits are the likeliest to come under the supply chain of high-tech products, one of the four product groups that could be subject to the tariffs.
"We expect very limited impacts on the auto and auto parts sector," said Kampon Adireksombat, KS's senior vice-president. "While auto and auto parts might seem to be under the new energy vehicle product group, most Thai auto parts, including auto electronics components, supply European carmakers.
"We maintain our 2018 export growth forecast at 5.3% (nominal and US-dollar basis) due to, one, we believe that a trade war would be a concern to the markets but is unlikely to take place, and, two, integrated circuit exports to China account for only 0.5% of total exports."