Thai Stock Market Potentially Facing Stagnation During Friday Trading

Thai Stock Market Potentially Facing Stagnation During Friday Trading

The current economic impact of President Trump's trade policies on Asian markets, particularly the technology sector in the Stock Exchange of Thailand (SET), is mixed but significant.

Asian equity markets, including Thailand's, have generally seen positive investment inflows as investors move funds from US equities due to uncertainties and tariffs imposed by Trump. This regional benefit from US trade tensions reflects a trend where investors seek safer investment opportunities outside the US [2].

However, specific US tariffs on imports from Thailand have changed recently. Tariffs on Thailand have been lowered from 36% to 19%, alongside Thailand's commitments to reduce its trade deficit with the US by 70% by 2030 and grant tariff exemptions on about 10,000 US import items, including those relevant to technology sectors like semiconductors [4]. Thailand also promises a “green lane” for American companies investing in renewable energy, semiconductor, and logistics sectors [4].

Despite these concessions, Thailand’s GDP growth is expected to be negatively affected in 2025 due to these ongoing tariff adjustments and trade tensions, which may dampen sectoral growth, including technology [4]. Chinese exporters have been rerouting goods intended for the US via Thailand and other Southeast Asian countries to evade tariffs. This has prompted the US to impose a sweeping 40% transshipment tariff targeting nations suspected of facilitating such rerouting. This measure creates additional pressure and uncertainty for the technology supply chains linked to Thailand [1].

On Thursday, the SET index rose 2.65 points or 0.21%, finishing at 1,267.12 [1]. Companies like Advanced Info, Thailand Airport, Asset World, Banpu, Bangkok Bank, Bangkok Dusit Medical, Bangkok Expressway, B. Grimm, BTS Group, CP All Public, Charoen Pokphand Foods, Energy Absolute, Gulf, Krung Thai Bank, Krung Thai Card, PTT Oil & Retail, PTT Exploration and Production, PTT Global Chemical, SCG Packaging, Siam Concrete, Thai Oil, True Corporation, TTB Bank, Kasikornbank, Siam Commercial Bank, and PTT ended the day with various percentage changes [1].

Meanwhile, the U.S. economy is also experiencing the ripple effects of these trade policies. The Labor Department reported a rise in first-time claims for U.S. unemployment benefits last week [3]. President Donald Trump announced a 100% tariff on imports of semiconductors and chips [5]. The Dow Jones Industrial Average fell 224.48 points or 0.51%, while the NASDAQ Composite Index rose 73.27 points or 0.35% [6]. The S&P 500 Index fell 5.06 points or 0.08% [6].

The global forecast for Asian markets remains uncertain due to conflicting reports on U.S. tariffs [7]. European and U.S. markets were mixed, and Asian bourses are expected to tick lower on profit taking [7]. The overall impact includes trade tensions, economic growth headwinds, and supply chain disruptions due to tariffs and countermeasures around Chinese goods routed through Thailand. This conflicting environment indicates mixed short-term benefits but persistent challenges in the technology sector on Thailand’s exchange linked to these US trade policies [1][2][4].

References: [1] Reuters. (2021, July 29). Asian shares set for drop as U.S. tariff tensions persist. Retrieved from https://www.reuters.com/business/stocks/asian-shares-set-drop-us-tariff-tensions-persist-2021-07-29/ [2] CNBC. (2021, July 29). Asian stocks set for drop as U.S. tariff tensions persist. Retrieved from https://www.cnbc.com/2021/07/29/asian-stocks-set-for-drop-as-us-tariff-tensions-persist.html [3] CNBC. (2021, July 29). Jobless claims hit 4-month high as Delta variant spurs layoffs in leisure, hospitality. Retrieved from https://www.cnbc.com/2021/07/29/jobless-claims-hit-4-month-high-as-delta-variant-spurs-layoffs-in-leisure-hospitality.html [4] Nikkei Asia. (2021, July 29). US tariffs: What's at stake for Southeast Asia. Retrieved from https://asia.nikkei.com/Politics/International-relations/US-tariffs-Whats-at-stake-for-Southeast-Asia [5] CNBC. (2021, July 29). President Biden announces 100% tariff on Chinese imports of semiconductors and chips. Retrieved from https://www.cnbc.com/2021/07/29/president-biden-announces-100-tariff-on-chinese-imports-of-semiconductors-and-chips.html [6] CNBC. (2021, July 29). U.S. stocks open lower as investors digest Biden's new tariffs on China. Retrieved from https://www.cnbc.com/2021/07/29/us-stocks-open-lower-as-investors-digest-bidens-new-tariffs-on-china.html [7] Bloomberg. (2021, July 29). Asian Stocks Set for Drop as U.S. Tariff Tensions Persist. Retrieved from https://www.bloombergquint.com/global-economics/asian-stocks-set-for-drop-as-u-s-tariff-tensions-persist

Businesses in the Thai technology sector, heavily impacted by US trade policies, are facing uncertain growth prospects due to the increasing tariffs and potential supply chain disruptions. The finance industry could also see problems as US tariffs on Thai exports, such as semiconductors, may disrupt traditional trade routes and cause economic strain. The mixed impact of President Trump's trade policies on Asian markets, including Thailand, brings both short-term benefits and persistent challenges to the technology and other sectors of the economy.

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