Thailand’s Office of Industrial Economics (OIE) has warned that new US tariffs could decrease the country’s industrial exports by about 200 billion baht (US$5.4 billion) in 2025.

This decline may cut industrial GDP growth by about 1.02%.

The OIE originally forecasted industrial GDP growth of 1.5% to 2.5% for 2025. However, this projection is likely to be revised due to tariff concerns.

Updated projections are expected in May 2025. The US tariffs, announced in April 2025, propose a 36% levy on Thai imports.

However, implementation has been delayed by 90 days for further negotiations. Thailand has until July 2025 to finalize negotiations with the US.

🔗 Source: Nation Thailand

🧠 Food for thought

1️⃣ Thailand faces a structural economic crossroads amid export vulnerabilities

Thailand’s exposure to US tariffs reveals a fundamental economic vulnerability that has been building for years.

The nine industrial sectors targeted for restructuring—automotive, petrochemicals, bio-based, food, medical devices, and others—collectively represent 70% of the country’s manufacturing GDP, demonstrating a significant concentration of economic risk 1.

This high dependence on export-oriented manufacturing explains why the projected 200 billion baht reduction in industrial exports would cut industrial GDP growth by a substantial 1.02 percentage points 1.

Thailand’s longer-term economic trajectory shows concerning signs, with growth projected to average just 2.7% from 2022 to 2030, significantly below historical averages and potentially insufficient to achieve high-income status 2.

The restructuring initiative represents not just a response to immediate tariff threats but an acknowledgment that Thailand’s traditional export-led growth model requires fundamental reimagining to remain viable.

2️⃣ Fiscal challenges complicate Thailand’s economic stimulus options

Thailand’s ability to counteract tariff impacts through fiscal stimulus is severely constrained by its deteriorating public finances.

Public debt has risen dramatically from 40% of GDP in 2014 to 60% currently, amounting to 12 trillion baht, limiting the government’s financial flexibility to respond to economic shocks 3.