Though the US has already reached trade agreements with many countries, Thailand’s negotiations with Washington remain complicated in the final phase as President Donald Trump says a Thailand-Cambodia truce is a condition for resuming trade talks.
Wikij Tirawannarat, senior vice-president of Bualuang Securities, said the border standoff could have economic consequences given Trump’s condition.
Trump said he spoke to leaders of Thailand and Cambodia, noting US officials were asked to resume trade negotiations with both countries, which agreed to halt fighting along the border.
However, the Royal Thai Army claimed Cambodia violated the hours-old truce, with sporadic clashes continuing despite an agreement to end the deadly fighting in the disputed areas.
“Thailand’s negotiations with the US on tariff rates for Thai exports face higher risks and complications as Trump insists on a truce as a condition for trade talks,” said Mr Wikij.
“The situation remains unclear. Regarding stock market investment, such uncertainties could lead to panic selling about a week from now.”
The global economy remains steady after the US reached an agreement on tariffs with many major economies including the European Union, China and Southeast Asian nations such as Vietnam, Indonesia and the Philippines.
“However, Thailand remains under threat from ongoing floods, losses from the border conflict with Cambodia and an economic slowdown, mainly due to higher US tariffs,” he said.
Padermpob Songkroh, managing director of Krungsri Securities, said risks associated with the Thailand-Cambodia border dispute remain after both countries agreed to an unconditional ceasefire following peace talks in Malaysia on Sunday.
Concerning trade negotiations with the US, downside risks “are unlikely to be huge” after Trump said on Monday most trading partners that did not negotiate separate trade deals would soon face tariffs of 15% to 20%.
“Such a scenario is in line with the Bank of Thailand’s forecast that Thailand could face a 18% US tariff, with Thai GDP likely to expand by 2.3% this year,” said Mr Padermpob.
Rakpong Chaisuparakul, senior vice-president of KGI Securities (Thailand), said the border ceasefire should ease stress from the military clash and the potential implications for the Thai economy, notably border trade between the two countries.
Based on recent press reports, Trump seems pleased with the ceasefire deal, which could be a good sign for finalising a US-Thailand trade deal by the Aug 1 deadline, he said.
KGI’s view is the final tariff rate for Thailand could be 19-20%.
credit : https://www.bangkokpost.com/business/general/3077877/talks-depend-on-truce-in-border-altercation
