Thailand-US Tariff Talks: Navigating Opportunities in Thai Export Sectors – A Sectoral Deep Dive

Thailand’s $55 billion export relationship with the U.S. hangs in the balance as tariff negotiations reach a critical juncture in 2025. With a 36% tariff threat looming and geopolitical stakes rising, investors are poised to capitalize on sector-specific exposures in automotive, electronics, and agriculture. This article dissects the risks and rewards, revealing why Thai equities with U.S. ties offer asymmetric upside ahead of Q3 2025 trade updates.

Automotive Sector: 25% Tariff on Parts – A Turning Point for Thai Exports

The automotive industry, accounting for 40% of Thailand’s exports to the U.S., faces immediate pressure from the 25% tariff on auto parts imposed on May 3, 2025. While this tariff is a near-term headwind, a breakthrough in negotiations could unlock a $2.3 billion GDP boost by resolving the 36% retaliatory tariff threat. Key catalysts include:

• Thailand’s fleet renewal proposal: A $2.5 billion Boeing order for Thai Airways could ease U.S. trade imbalances and signal goodwill.
• Valuation multiples: Thai auto stocks trade at P/E ratios of 12x–14x, below historical averages and cheaper than regional peers.

Investors should overweight Toyota Motor Manufacturing Thailand (TMMThailand) and its suppliers, as a tariff resolution could reignite export growth.

Electronics Sector: Semiconductors and Supply Chain Leverage

Thailand’s electronics exports, valued at $22 billion annually, are under threat from U.S. Section 232 investigations targeting semiconductors. However, Thailand’s role as a global hub for chip assembly and its $45 billion trade deficit with China present hidden advantages:

• Transshipment arbitrage: Stricter U.S. enforcement of origin rules could divert Chinese goods through Thailand, boosting local manufacturing.
• Nearshoring tailwinds: U.S. companies seeking alternatives to China may accelerate investment in Thailand’s 5G and EV component supply chains.

Firms like ASE Technology (semiconductor packaging) and PTT Global Chemical (materials for EVs) offer leveraged exposure to a resolution, trading at 30% below 2023 highs.

Agricultural Sector: Corn Imports and Trade Balance Tipping Points

Thailand’s pledge to replace $5 billion in South American corn imports with U.S. suppliers is a linchpin of tariff negotiations. Success here could slash the $45.6 billion bilateral surplus and trigger tariff relief:

• Margin opportunities: Thai corn imports at $5/ton cheaper than Brazilian alternatives could boost profits for firms like Charoen Pokphand Foods (CPF).
• Valuation case: CPF trades at a P/E of 9x, below its 10-year average of 14x, despite its dominant 40% share of Thai corn imports.

Risks: Prolonged Talks and Geopolitical Crosscurrents

• Negotiation delays: A second round of talks was canceled in April, with only a 90-day pause delaying the 36% tariff until July 9.
• China’s shadow: Transshipment loopholes and retaliatory tariffs from Beijing could undermine gains.

Geopolitical Tailwinds: Thailand as a U.S. Counterbalance to China

Thailand’s strategic location in Southeast Asia and its push for BRICS membership align with U.S. goals to diversify supply chains away from China. A successful deal could cement Thailand as a preferred manufacturing base, driving FDI inflows and boosting equity valuations.

Near-Term Catalysts: Q3 2025 – Act Now or Miss the Rally

• July 9 deadline: Resolve the 36% tariff or face a GDP contraction to 0.7–1.4%.
• September trade data: Confirm whether U.S. corn imports and auto part exports rebound post-tariff resolution.

Conclusion: Overweight Thai Equities with US Exposure – The Clock is Ticking

With Thai equities trading at 10-year lows relative to the MSCI Emerging Markets index, the risk-reward is skewed heavily toward buyers. A successful July deal could trigger a 20–30% rebound in sectors like automotive and agriculture. Investors should:

1. Buy now: Target TMMThailand (12x P/E), CPF (9x P/E), and SET Index ETFs (e.g., THD).
2. Monitor catalysts: Track July tariff updates and September export data closely.

The window to capitalize on Thailand’s tariff tailwinds is narrowing. With geopolitical alignment and sector-specific leverage in your favor, delay could mean missing one of 2025’s most compelling opportunities.

Act before the market catches fire.