Thailand aims to capitalise on US-China trade tensions

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Thailand is positioning itself as a key beneficiary of the US-China trade war escalated by US President Donald Trump’s return to office, offering fresh incentives to attract global companies seeking alternatives to China.

Thai Commerce Minister Pichai Naripthaphan said Thailand is an appealing and safe manufacturing hub with a strong industrial base and geopolitical neutrality.

“Trump’s win will be beneficial for Thailand,” Pichai said, adding that the ongoing trade dispute between the US and China is expected to redirect significant investments into Southeast Asia (SEA).

Global businesses, particularly in tech and manufacturing, are increasingly turning to Thailand as a neutral player, with companies looking to avoid punitive tariffs by relocating operations.

Sectors driving growth

Thailand’s longstanding automobile and electronics manufacturing strengths remain central to its appeal. The country is also emerging as a high-tech hub, with investments in AI data centres and semiconductor manufacturing.

US firms such as Nvidia, Alphabet, and Microsoft have announced plans to expand operations in Thailand, while Hewlett Packard Enterprise, Seagate Technology Holdings and Western Digital ramp up production.

The Board of Investment reported a 42% increase in investment proposals in the first nine months of 2024, with the value reaching 723 billion baht—the highest since 2015. Most of these new investments are in electronics and data centres, reflecting Thailand’s growing importance in high-tech supply chains.

balancing diplomacy and economic strategy

Thailand’s neutral foreign policy, coupled with its historical alliance with the US, is a cornerstone of its investment strategy. Prime Minister Paetongtarn Shinawatra congratulated Trump on his re-election and emphasised the strong US-Thai alliance, underscoring her government’s commitment to fostering bilateral ties. Meanwhile, Pichai’s recent visit to China to court investors reflects Thailand’s balanced approach to foreign relations.

“The US, China, India, and Russia see us as a friend. We don’t have to choose sides, and that makes us attractive for investments because we’re seen as safe,” Pichai said.

growth outlook for 2024 and beyond

Thailand is projecting 1 trillion baht in new investment commitments for 2024, driven by its growing reputation as a regional manufacturing and technology hub. As global businesses continue to recalibrate supply chains in response to geopolitical tensions, Thailand’s proactive strategy positions it as a critical player in high-tech manufacturing and global trade integration.

With significant investments in AI, electronics, and semiconductors, coupled with targeted government incentives, Thailand is poised to strengthen its economic standing amid the complexities of the US-China trade war.