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Thailand is a success story of globalisation, and has benefited enormously from an open global economic order. The country’s rise to upper-middle income status has been fueled by inward investment and export industries.
In April, the United States began to impose severe tariffs on a wide range of Chinese goods. China has responded in kind. Both sides are escalating the confrontation.
What are the implications for Thailand? Will the economy be hit by global market disruption? Or could it gain from diversion of trade and supply chains? Will there be other fallout? How might the Thai government manage these challenges?
This subject has far-reaching consequences for local and international businesses and it has been debated recently by four panelists chosen by the FCCT.
Where is this coming from ?
The main reason behind the US-China trade war is that the United States wants to reduce its trade deficits.
US President Donald Trump tweeted on 4 April 2018 that ‘[the United States has] a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!’.
We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S. Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!
— Donald J. Trump (@realDonaldTrump) April 4, 2018
Since then Donald Trump has also tweeted more explicit reasons to consider that the trade with China is unfair and thus damaging US commercial interests. Like in a more recent tweet of September 9 :
If the U.S. sells a car into China, there is a tax of 25%. If China sells a car into the U.S., there is a tax of 2%. Does anybody think that is FAIR? The days of the U.S. being ripped-off by other nations is OVER!
— Donald J. Trump (@realDonaldTrump) September 9, 2018
Many US commentators think that the enormous imbalance of trade with China is tantamount to fueling US indebtedness to China, which they consider to be a huge vulnerability for the United States.
China also owns about a third of the US treasury bonds and could use this as a leverage if things goes wrong.
commented Kirida Bhaopichitr, Director of the Economic Intelligence Service (EIS) at the Thailand Development Research Institute (TDRI).
But the US trade deficit is not only the only concern of Donald Trump with China.
China ‘s raising influence and plan to become a tech power by 2025 is a direct threat to the United State leadership
says Kirida Bhaopichitr
By staging a trade war with China the United States also wants to hamper China’s progress toward being a high-tech superpower. The tariffs…