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Economy

Thailand suffers export decline on fall in China shipments

Bangkok sees first annual drop in four years as trade war takes a toll

Bangkok Port: Chinese importers bought less in 2019 as the trade war squeezed production in the country.   © Reuters

BANGKOK -- Thailand's exports fell for the first time in four years in 2019, the country said on Jan. 22, as Washington's trade war with Beijing squeezed shipments to China, one of the country's largest trade partners.

Exports to the U.S., meanwhile, increased as customers there looked for alternatives to Chinese-made products.

Total exports fell 2.7% from 2018 to $246.2 billion, the Thai Commerce Ministry said.

Exports to China decreased 3.8% to $29.1 billion. Companies are believed to be buying less parts for their Chinese production hubs, with shipments of rubber products down 15% and computers and parts down 9%.

A Chinese economic slowdown was also behind Thailand's last decrease in exports in 2015. Thai shipments to China have jumped 80% in 10 years as their economic ties have grown stronger than ever.

Thai exports to the U.S. increased 11.8% to $31.3 billion, making the country its biggest trade partner for the year over China. Machinery and machinery parts exports rose 10%, and automobile and auto parts exports rose 7%, as American importers sought alternative sources for products they were buying from China.

Thailand's exports to Japan, the European Union and other members of the Association of Southeast Asian Nations fell, partly due to a strong baht. The Thai currency is trading at its strongest level in about six years against the dollar.

Still, Thailand's trade surplus doubled from 2018 to $9.6 billion. Imports fell even more than exports because of an economic slowdown at home. Its trade surplus with the U.S. increased 7% to $14 billion.

The U.S. Treasury Department said in a Jan. 13 report that Thailand is "close to triggering key thresholds" to be placed on a monitoring list for its trade and currency policies. Thailand could end up on the watchlist if their trade imbalance continues to grow.

Looking forward, the Thai government expects trade to pick up thanks to the "phase one" trade deal signed by the U.S. and China. "We can expect a 1.5% to 2% increase in exports in 2020," said Pimchanok Vonkorpon, director-general of the Commerce Ministry's Trade Policy and Strategy Office.

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