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21 Sep 2018

Trading

August Export Value Hit a New Record High of USD22.8 Billion while the US-China Trade Spat Begins to Have a Clearer Impact on Thai Shipments (Business Brief No.3761)

          The value of Thailand's outward trade reached THB22.794 billion for August, representing a new record high. However, the August export growth grew at a slower pace at 6.7 percent YoY, due partly to a high 2017 base and 66.6 percent contraction in gold shipments. If the value of gold exports was excluded, our August shipments grew 10.3 percent YoY. Factors contributing to favorable export growth over the past 18 straight months include the upturn in global crude oil prices. In August, global crude oil prices were substantially higher than August 2017. In addition, Thai car, accessories and auto-parts shipments to Vietnam reverted to high growth. Our agricultural exports also improved, including rice and cassava products, because their shipment volume contracted less.

          Meanwhile, the US-China trade dispute has begun to undermine several Thai export categories, especially those in China's supply chain, including integrated circuits. This is because the US began to impose a 25 percent tariff on integrated circuit imports from China on August 23, 2018 following its announcement on June 15, 2018. As a result, our integrated circuit exports to China began to shrink substantially in July 2018. Our exports to US, which rose significantly during 1H18, begun to decline, as well.

            The US decision to collect new tariffs on an additional USD200 billion worth of imports from China will likely hurt Thai exports via the supply chain linked with China and the influx of Chinese goods into the region. The impact of such a decision by the US and China's retaliation on Thai exports may become more apparent in 2019. We at KResearch have already assessed the performance of 2018 Thai exports, which includes the impact of the US tariffs collected on USD50 billion worth of Chinese imports. As it is expect that 2H18 Thai shipments may slow from 1H18, KResearch continues to maintain our 2018 export growth forecast at 8.8 percent.​