BANGKOK — A report by the Office of Small and Medium Enterprises Promotion (OSMEP) shows concern over the impact of a renewed trade war under a possible second term of President Donald Trump. The former president has announced new import tariffs affecting several countries, including Thailand, with rates of up to 36% set to take effect on April 9, 2025.
In 2024, Thai SMEs relied heavily on the US market, which accounted for 20% of their total exports worth 7.634 billion dollars, or 14% of Thailand’s total exports to the US. In contrast, SME imports from the US amounted to 2.563 billion dollars, resulting in a trade surplus of 5.070 billion dollars.
In the first two months of 2025, SME exports to the US totaled 1.44 billion dollars, an increase of 39.6% compared to the previous year. The top five export categories: electrical equipment, machinery, gems and jewelry, furniture and plastics, accounted for 75% of all SME exports to the US.
OSMEP estimates that the new tariff measures could reduce SME exports to the US by 1.128 billion dollars (approximately 38.3 billion baht) in 2025. As a result, SME GDP growth could fall by 0.2 percentage points from the original forecast of 3.5%. The extent of the impact will depend on the Thai government’s negotiations and possible retaliatory measures by other trading partners.
OSMEP’s initial analysis identifies 12 major product groups that are highly dependent on the US market (more than 10% of their exports are to the US and worth over 10 million dollars). Approximately 3,700 Thai SME exporters could be affected:
1. Electrical Equipment
- Export value: 2.792 billion dollars
- SME share: 34%
- U.S. market dependency: 59%
- SME exporters: 914 firms
2. Gems and Jewelry
- Export value: 758 million dollars
- SME share: 45%
- U.S. market dependency: 19%
- SME exporters: 885 firms
3. Machinery and Components (Including air conditioner parts, faucets, valves, aircraft engine components)
- Export value: 466 million dollars
- SME share: 25%
- U.S. market dependency: 52%
- SME exporters: 156 firms
4. Furniture (Including chairs, sofas, lamps, medical furniture)
- Export value: 432.15 million dollars
- SME share: 45%
- U.S. market dependency: 68%
- SME exporters: 400 firms
5. Iron and Steel Products (Such as joints, steel wires, nails, bridges, valves, sanitary ware, kitchen/tableware)
- Export value: 181.07 million dollars
- SME share: 24%
- U.S. market dependency: 31%
- SME exporters: 422 firms
6. Automobiles and Parts (Including trailers and semi-trailers)
- Export value: 116 million dollars
- SME share: 8%
- U.S. market dependency: 21%
- SME exporters: 138 firms
7. Processed Fruit and Vegetable Products (Juices, pickled fruit/vegetables, preserves, jams)
- Export value: 73.97 million dollars
- SME share: 10%
- U.S. market dependency: 14%
- SME exporters: 293 firms
8. Aluminum Products (Construction materials, pressurized gas containers, various aluminum items)
- Export value: 68.23 million dollars
- SME share: 55%
- U.S. market dependency: 53%
- SME exporters: 74 firms
9. Knitted or Crocheted Apparel (Vests, children’s clothing, suits, shirts, gloves, overcoats, tracksuits, ski wear, swimwear)
- Export value: 50.67 million dollars
- SME share: 17%
- U.S. market dependency: 41%
- SME exporters: 190 firms
10. Cereals (Mainly rice)
- Export value: 42 million dollars
- SME share: 5%
- U.S. market dependency: 11%
- SME exporters: 85 firms
11. Rubber and Rubber Products (Including shock-absorbing mats and industrial rubber tubing)
- Export value: 24 million dollars
- SME share: 16%
- U.S. market dependency: 16%
- SME exporters: 121 firms
12. Processed Meat and Seafood (Shrimp, shellfish, crabs)
- Export value: 14 million dollars
- SME share: 7%
- U.S. market dependency: 49%
- SME exporters: 30 firms
To mitigate these effects, Thai SMEs urgently need to adapt by seeking new markets and regional trading partners. They should also take advantage of trade agreements (FTAs) and consider relocating production facilities to countries that are not affected by US tariffs.
The government is urged to restore confidence in the economy by encouraging investment, increasing household income, boosting domestic consumption and promoting tourism to reduce dependence on exports.
Nevertheless, Thailand could also face an increase in products from other countries looking for alternatives to the US market. Therefore, quick policy responses and awareness campaigns to promote product quality and standards are crucial to avoid potential trade deficits in the future.
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