The sluggish Thai automotive industry may worsen if US President Donald Trump pushes ahead with his plan to impose tariffs on car imports, says the Federation of Thai Industries (FTI).
Trump announced last month he would impose a 25% auto tariff on April 2, but the levy on shipments from Canada and Mexico is now paused for one month after the tax took effect on March 4.
The decision pleased some US car companies that have factories in neighbouring countries.
Yet auto manufacturers in Thailand remain worried over Washington's trade policy as Thailand is ranked 16th in passenger car exports to the US and 11th in commercial motor vehicle (CMV) shipments, according to the FTI.
"We are afraid Trump's tariff policy will cause a slowdown in the passenger car and CMV segments," said Kriengkrai Thiennukul, chairman of the FTI.
In 2024, Thailand exported 42,000 passenger cars and 20 CMVs to the American market.
The US was the world's largest importer of passenger cars and CMVs, worth US$267 billion in total last year.
If Trump's new auto tariff is imposed as planned next month, car exports from Thailand cannot avoid an impact, dealing a blow to an already struggling auto industry, he said.
Domestic sales have slumped as potential buyers are often rejected on loan applications given the high level of household debt.
In January, domestic vehicle sales fell by more than 12% year-on-year to 48,092 units, while vehicle exports plunged by 28.3% to 62,321 units, the lowest level in 33 months, according to the FTI's Automotive Industry Club.
The poor exports were mainly attributed to growing concerns over Trump's plan to impose new tariffs on auto imports, as well as cheaper car exports from China, Surapong Paisitpatanapong, vice-chairman of the FTI and spokesman for the club, said earlier.
Thai auto parts manufacturers previously raised concerns over the US tariff impact as they indirectly export their products to Mexico via Japanese car companies that invest in Mexico, said Suphot Sukphisarn, secretary of the Cluster of FTI Future Mobility-ONE (CFM-ONE).
CFM-ONE is monitoring the situation to see whether Thailand will face specific US tariffs because the former has a trade surplus with Washington, which may make it a target, he said.