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

The Thai Finance Minister cautioned that new U.S. tariffs on auto imports will likely impact the country’s auto parts exports. He seeks to negotiate direct shipments to the U.S. instead of through other countries. Industry leaders perceive limited impact on local manufacturers, who largely supply non-exporting vehicles. The potential for further tariffs and their effects is still being evaluated.

On Thursday, Thailand’s Finance Minister Pichai Chunhavajira indicated that new U.S. tariffs would adversely affect exports of auto parts from Thailand. He expressed a desire to negotiate the possibility of direct shipments of these parts to the United States, rather than routing them through manufacturers in other countries.

Thailand serves as Southeast Asia’s leading automotive production hub, hosting major global automakers like Toyota and Honda. The recent announcement by U.S. President Donald Trump, regarding a 25% tariff on imported vehicles, has escalated the ongoing global trade tensions and triggered responses of criticism and retaliation from U.S. allies.

According to Minister Pichai, the tariffs will diminish the exports of Thai auto parts to countries that assemble vehicles, and he remarked, “We’ll have to see how much it will affect us.” He remains hopeful that Thailand could arrange to ship auto parts directly to the United States, as shifting production facilities to avoid tariffs would require significant time for companies.

Yeap Swee Chuan, CEO of AAPICO Hitech, one of Thailand’s prominent auto parts manufacturers, suggested that the tariffs’ impact may be limited. He noted that many of these parts supply local Japanese automakers whose vehicles are generally not exported to the U.S. Therefore, Thai manufacturers could remain relatively unaffected.

Currently, AAPICO sends only a minimal portion of its production to the U.S., and the new tariffs would complicate direct shipments. Minister Pichai also addressed potential tariffs on other exports, stating that it is too soon to predict immediate impacts, emphasizing the need to wait and assess how negotiations will unfold as future tariffs are announced. There is concern in Thailand regarding the possibility of new U.S. tariffs, attributed to its substantial trade surplus with America.

In summary, Thailand’s Finance Minister remains cautious about the potential impact of new U.S. auto tariffs on the country’s auto parts export industry. While expressing hopes for direct shipments to the U.S., he acknowledges the uncertainty surrounding the situation. Industry leaders like Yeap Swee Chuan believe the effects may be limited, especially since most local production caters to non-export markets. The Thai government is prepared to analyze the situation and negotiate accordingly.

Original Source: www.channelnewsasia.com