BOT chief warns Trump-era tariffs are distorting Thailand’s economy—exports hit, Chinese imports surge. Easing to continue, but structural reform is key.
Sethaput Suthiwartnarueput, Governor of the Bank of Thailand (BOT), warned in an interview with Nikkei Asia that US import tariffs — coupled with trade diversion from other markets — could seriously damage several Thai industries and leave lasting scars on the economy.
His remarks align with growing concerns across Asia, where the ripple effects of US tariff measures, introduced under President Donald Trump, are beginning to reach real sectors of the economy, after months of financial market volatility.
Sethaput highlighted that export-reliant sectors such as processed food, electronics, and auto parts — particularly tires — are especially vulnerable if access to the US market becomes restricted.
SMEs Face Rising Risk from Chinese Imports
Beyond exports, Thailand's domestic market is also at risk as goods that can no longer enter the US are increasingly redirected to Thailand. This includes products such as furniture, textiles, garments, plastics, petrochemicals, and steel.
“Imports will rise from multiple countries — but especially from China,” Sethaput noted.
“What’s particularly concerning for us,” he added, “is that many of the sectors being hit by surging imports are composed largely of SMEs. These businesses face higher risks, and SMEs remain a vital part of the Thai labour market.”
The central bank governor’s warning underscores the need for policy vigilance, as Thailand braces for both external trade shocks and internal structural vulnerabilities.
According to recent figures released by China’s General Administration of Customs, Chinese exports to the US dropped by 21% in April, following reciprocal tariffs announced by the Trump administration on April 2. In contrast, China’s global exports grew by 8%, with exports to Thailand jumping 28%—a sharp surge that has caught the attention of Thai policymakers.
Sethaput gave an interview with Nikkei Asia on May 23. Since the interview, the US trade policy landscape has only become more volatile. On May 28, the US Court of International Trade ruled to halt tariff collections, citing overreach by former President Trump. However, a day later, a federal appeals court granted a temporary stay, allowing the tariffs to continue for now, deepening uncertainty for global markets.
“The wide range of economic outcomes makes forecasting impossible,” Sethaput said, noting that the central bank had to do something it had never done before: publish two parallel economic scenarios.
On April 30, the BOT revised its GDP forecast and laid out two possible paths:
Base case: GDP growth of 2% in 2025
Worst-case: Growth as low as 1.3%
These projections align with the National Economic and Social Development Council (NESDC), which estimates Thai GDP growth in the range of 1.3–2.3%, with an average of 1.8% for the year.
Source: Nation Thailand
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<p>Time: 2024 By: Ministry of Industry and Trade</p>
