Thai Auto Parts Exports Face Challenges from U.S. Tariffs

Thailand’s Finance Minister warns that U.S. auto tariffs will impact Thai auto parts exports. Negotiations are sought for direct shipments to the U.S. Despite potential challenges, the chief executive of AAPICO Hitech believes the overall effect may be limited, as most production is supplied locally. Thailand is cautious towards the implications of a significant trade surplus with the U.S.

The Finance Minister of Thailand has stated that the recent tariffs imposed by the United States on automobiles will negatively affect the export of Thai auto parts. He expressed the desire to negotiate for more direct shipments of these parts to the U.S., bypassing intermediary manufacturers in other countries.

Thailand is recognized as the largest automotive production hub in Southeast Asia, serving as a key export base for renowned automakers like Toyota and Honda. The new tariff, which imposes a 25 percent charge on imported vehicles, could hinder Thailand’s auto parts exports to countries that manufacture cars.

Minister Pichai Chunhavajira noted that assessing the full impact of the tariffs on Thailand’s automotive industry would require time. He emphasized the importance of negotiating to ship auto parts directly to the U.S. rather than relying on foreign production facilities to evade the tariffs.

Yeap Swee Chuan, the chief executive of AAPICO Hitech, one of Thailand’s prominent auto parts manufacturers, reassured that the immediate effect of these tariffs may be limited. He highlighted that most vehicles supplied by them are directed to local Japanese companies, which are not typically exported to the U.S. He pointed out that a small portion of AAPICO’s production is intended for the U.S. market, and the tariffs could complicate direct shipments.

Minister Pichai also commented on potential future tariffs that President Trump may announce, suggesting that while there is concern, the precise impact remains uncertain, offering an opportunity for further negotiations. Thailand is wary of potential U.S. tariffs, given its significant trade surplus with the United States.

In summary, Thailand’s Finance Minister has indicated that new U.S. tariffs on automobiles could adversely affect the export of Thai auto parts. While immediate impacts may be limited, negotiations to facilitate direct shipments to the U.S. are sought to mitigate potential losses. Thailand remains vigilant regarding its substantial trade surplus with the U.S. and the possibility of additional tariffs in the future.

Original Source: www.channelnewsasia.com