Thailand: Trade War Likely to Rise the Import of Cheap Chinese Goods
A fresh trade war between the US and China is harming small and medium businesses in Thailand. According to the Federation of Thai Industries (FTI), the ongoing tension between the two big economies might lead to cheap Chinese goods entering the Thai market.
Local manufacturers are worried not just about high US tariffs on Thai goods but also about losing sales because cheap Chinese products are entering the country in large numbers.
ML Peekthong Thongyai, vice-chairman of the FTI, stated that Chinese goods are 20-40% less expensive than Thai goods.
Out of 540 executives and FTI members, 45% said there’s a clear price difference between Thai and Chinese products. About 21.1% mentioned that Chinese goods are 10-20% cheaper. According to ML Peekthong, Chinese businesses have the advantage as they enjoy lower production costs and they have better technology.
Last week, Trump announced a new 34% tariff on Chinese goods imported to the US, which led Beijing to hit back with a 34% tariff on US goods this week. As a result, Trump imposed a total of 104% in duties on goods from China.
According to ML Peekthong, Chinese companies are now looking for new markets, and Southeast Asia is an expected target.
With too many products already in their own country, Chinese firms can’t depend much on domestic sales anymore.
71% of people surveyed by the FTI believe that Thai businesses, particularly small and medium-sized ones, will lose market share to cheaper Chinese imports.
Around 62% want the government to implement stricter rules to protect the local sellers. Another 44.6% support the enforcement of the 1999 Anti-Dumping Act, and 39.6% want a review of the rules for tax-free zones. In these zones, manufacturers don’t have to pay duties when they import machines or raw materials for use in the zone.
About 55.6% of the respondents also said that Thai entrepreneurs should focus on using high-quality, eco-friendly materials to make their products more valuable. Around 52.4% of them suggested using technology, and 44% believed in raising the quality standards of finished products.
