Thai outbound shipments to the US and China, however, slowed in July 2018 amid an ongoing trade war between the US and China. The value of Thai exports to the US contracted for the first time in 21 months at 1.9 percent YoY due to a decline in exports of machinery, electronic parts, instant noodles and ready-to-eat food. Thai exports to China grew at a slower pace to 3.6 percent YoY due to a drop in shipments of agricultural/agro-industrial products, timber products and passenger cars.
KResearch views that Thai exports are likely to slow further in the second half of this year due to US trade protectionist measures against many countries which will have a greater impact on Thai exports in the second half of the year than in the first half and a high base in the previous year. The growth of Thai outbound trade in the second half of this year is likely to decelerate from 11-pecent growth in the first half. As a result, Thai exports for the whole of 2018 are likely to expand 8.8 percent YoY.
Nonetheless, many issues deserve close attention in the second half of 2018: (1) There is no agreement in sight yet for the ongoing US-China trade dispute and, on August 23, 2018, the US will collect 25-percent tariffs on USD16 billion worth of Chinese exports. (2) The Turkish economic woes are expected to continue into next year and cause vulnerability in exchange rates and movements of global fund flows. (3) The US-Iranian tensions may impact the world's crude oil prices as well.