Thai experts urge innovation push to counter tariffs

Thai experts have called for a long-term strategy to offset the negative effects of US tariffs, saying Thailand should strengthen its competitiveness by investing more in innovation and technology while expanding its trade partners, including focusing more on China.

The United States recently announced a new "reciprocal" tariff rate for Thailand at 19 per cent, which is significantly lower than the previously proposed 36 per cent. The new rate is almost on par with those on several other members of the Association of Southeast Asian Nations, but lower than the levy on Vietnam.

"The reduced tariff attributed to the government's negotiation efforts is not over yet," said Wichai Kinchong Choi, a business development expert at Kasikorn Bank in Bangkok. "What's more important is to strengthen the country's risk resistance capacity amid the future global challenges through building a robust economy."

A cautiously optimistic attitude should be held as the US has not yet revealed its additional conditions, Wichai said. According to the agreement, for example, Thailand must fully open its domestic agricultural product market and exempt agricultural products imported from the US from tariffs.

"The move will pose risks to Thailand's domestic fruit market," he said.

In the long term, he said, Thailand should further expand into new markets to diversify risk and enhance its production processes to reduce costs while further strengthening its partnership with ASEAN countries and major trade partners such as China.

"As the global trade will deepen, Thailand should urge its major sectors to accelerate reform by leveraging innovation and technology," Wichai said. "We need to adapt and enhance our competition by investing more in industries such as clean energy, artificial intelligence and electric vehicles that contribute to the kingdom's industrial upgrading and sustainable development."

After the announcement of the reduced tariff rate, Kasikorn Research Centre in Bangkok released a report estimating that the Thai economy is expected to grow by 1.5 per cent this year, an improvement from the prior projection of 1.4 per cent.

Pornchai Thiraveja, director-general of the Fiscal Policy Office at the Thai Finance Ministry, said in a recent interview with the Bangkok Post that the ministry plans to implement stimulus measures to spur domestic spending and investment to support the economy.

"As the global trade will deepen, Thailand should urge its major sectors to accelerate reform by leveraging innovation and technology," Wichai said. "We need to adapt and enhance our competition by investing more in industries such as clean energy, artificial intelligence and electric vehicles that contribute to the kingdom's industrial upgrading and sustainable development."

After the announcement of the reduced tariff rate, Kasikorn Research Centre in Bangkok released a report estimating that the Thai economy is expected to grow by 1.5 per cent this year, an improvement from the prior projection of 1.4 per cent.

Pornchai Thiraveja, director-general of the Fiscal Policy Office at the Thai Finance Ministry, said in a recent interview with the Bangkok Post that the ministry plans to implement stimulus measures to spur domestic spending and investment to support the economy.

Source: Nation Thailand