Global trade rarely feels personal, until it starts reshaping the economy you live in. For those of us watching Thailand from the inside, the ripples are becoming harder to ignore.
Supply routes are shifting, old alliances are being tested, and the big players, China, the US, the EU, are redrawing lines we used to take for granted. None of this spells disaster for Thailand, but it does mean the country can’t afford to coast. Staying competitive in a changing world takes clear thinking, not wishful thinking.
The Shifting Trade Map: US-China, Supply Chains, and ASEAN's Role
One of the most significant post-pandemic shifts in global trade has been the diversification of supply chains away from China. While Thailand isn’t trying to replace China, it’s quietly benefiting from “China plus one” strategies, particularly in automotive, electronics, and food processing.
Foreign investment from Japan, Korea, and increasingly Western firms reflects Thailand’s appeal as a stable, strategically located production base. That said, competition is rising, especially from Vietnam and Malaysia.
Thailand, a member of the Regional Comprehensive Economic Partnership (RCEP, in force since 1 January 2022, is also exploring, but not yet part of, the CPTPP. These frameworks offer a foundation, but effective implementation remains key. Infrastructure and workforce readiness remain critical if Thailand wants to stay attractive to global producers.
Export Strengths Under Pressure
Thailand’s economy relies heavily on a few core exports: cars, electronics, food products, and agricultural commodities. But these sectors are feeling the pressure.
The automotive sector, once a regional powerhouse, is adjusting to the electric vehicle transition. Chinese electric vehicle brands now account for over 70% of new EV sales in Thailand, driven by aggressive pricing and early investment. Over $4 billion in investment has been pledged so far, with the government easing EV-related policies further as recently as 30 July 2025.
Agriculture and food exports face headwinds too, from climate variability to tightening EU regulations. Even electronics, typically a growth story, now hinges on volatile global demand and tech cycles.
Exporters aren’t panicking, but they are being forced to rethink. That includes smarter logistics, better compliance with foreign standards, and in many cases, investment in upskilling.
New Partners, New Priorities
With traditional markets like the EU and China becoming more complex, Thailand is turning its focus toward regional and emerging partners.
India has emerged as a promising counterbalance, with rising demand for Thai goods and deeper bilateral cooperation. Trade with Indonesia, Vietnam, and the Philippines is also increasing, driven less by diplomacy and more by shared economic ambition.
In this new landscape, Thailand’s neutral posture is an advantage. It doesn’t need to pick sides, but it does need to sharpen its pitch, and show global firms and trading partners that it’s ready for the long game.
Tourism vs Trade: Balancing Two Pillars of Growth
Thailand’s post-COVID tourism rebound has been one of the clear bright spots in 2025. The country welcomed 15 million visitors by the end of June, with full-year projections now targeting 41 million arrivals. That recovery has boosted service-sector revenues, especially in Bangkok, Phuket, and Chiang Mai.
But tourism can’t carry the economy on its own. Unlike exports, it doesn’t support long-term production capacity or industrial growth. Leaning too hard on tourism risks leaving Thailand exposed to future shocks, be it another pandemic, geopolitical tension, or environmental pressure.
The best-case scenario is balance: strong trade infrastructure paired with a competitive tourism sector. One feeds domestic resilience; the other brings in global liquidity.
Currency Volatility and Regional Dependencies
The Thai baht has been relatively more stable in mid-2025, trading in a range of 32.1–32.5 against the US dollar. As of 24 July, USD/THB stood at 32.11, down approximately 4.6% year-to-date. While calmer than 2024, swings still influence trade margins and imported costs, especially in energy and electronics.
For exporters, a weaker baht offers short-term gains but also raises import costs. For investors and households, these swings complicate budgeting and planning.
Thailand remains closely tied to the Chinese and Japanese economies. That brings both opportunity and exposure. When China slows or pivots, Thailand often feels the aftershock, whether in exports, tourism, or capital flows.
Adapting to a New Global Order
Thailand isn’t in crisis, but it is in transition. Global trade patterns are evolving, and while that brings friction, it also creates space for those who adapt early and clearly.
What Thailand needs now isn’t reinvention, but refinement, the ability to move with the current without losing its footing. With the right mix of realism and agility, it’s well-positioned to navigate this reset with confidence.