Thailand’s trade deficit with China reached a historic high in the first four months of 2025, totaling $19.23 billion, with imports from China at $31.56 billion and exports at $12.33 billion. This surge is attributed to businesses stockpiling raw materials amid global trade uncertainties, particularly concerning potential U.S. tariff changes.
Key highlights
- Record Imports: Thailand’s imports from China hit a monthly record of $8.82 billion in April 2025 alone.
- Top Import Categories: Electrical machinery, general machinery, home appliances, computers, and chemicals saw significant increases.
- U.S. Tariff Impact: Concerns over U.S. tariff policy are driving manufacturers to secure inputs, with the U.S. being Thailand’s largest export market (19% of total exports).
- Export Challenges: A decline in fruit exports due to weather-related issues and a rapidly appreciating Thai baht are posing challenges to Thailand’s export sector.
- Trade Deficit Concerns: Economists caution against overly optimistic interpretations of export growth, highlighting the persistent trade deficit with China as a structural weakness.
- Negotiations with the U.S.: The outcome of U.S. tariff negotiations is critical, with the impact expected to be seen from July 2025 onward after the 90-day tariff pause ends.
Thailand’s trade deficit with China has hit a record high in the first four months of 2025, driven by a surge in imports as businesses stockpile raw materials amid global trade uncertainties and anticipated U.S. tariff adjustments. The deficit, particularly pronounced in sectors like electronics and home appliances, highlights a structural issue. Despite increased exports, domestic industrial production and value creation remain stagnant, undermining sustainable growth. Many exports are merely pass-through shipments with minimal local value added, reflecting weak integration between export activities and domestic industries.
The Commerce Minister expressed confidence in the trade negotiations with the U.S. and highlighted growth in other key markets such as ASEAN. The Ministry is also working to finalize an EU-Thailand Free Trade Agreement (FTA) by the end of 2025 to boost trade competitiveness. While Q2 exports are expected to maintain momentum, the second half of 2025 poses risks if the U.S. imposes additional tariffs.
Thailand has recorded a historic trade deficit with China in the first four months of 2025, reaching $19.23 billion. This marks the largest trade imbalance between the two nations to date. From January to April, Thailand imported $31.56 billion worth of goods from China while exporting only $12.33 billion in return .(Thailand Business News, The Star)
Key Drivers Behind the Deficit
- Surge in Imports: April 2025 saw imports from China hit a monthly record of $8.82 billion. This surge is largely attributed to Thai businesses stockpiling raw materials and components, particularly in anticipation of potential global trade disruptions and ahead of possible U.S. tariff changes .
- Top Import Categories: The most significant increases were observed in:
- Electrical machinery and parts: $1.67 billion (+110.6%)
- General machinery and components: $848.2 million (+37.8%)
- Home appliances: $658.6 million (+21.6%)
- Computers and related parts: $506.8 million (+35.1%)
- Chemicals: $496.8 million (−11%) .
- Export Challenges: Thailand’s exports to China have been hampered by a decline in fruit exports, attributed to weather-related drops in crop yields .
Economic Implications
Experts express concern over Thailand’s persistent trade deficit with China, particularly in sectors like electronics and home appliances. This structural imbalance indicates that increased exports have not translated into corresponding growth in domestic industrial production or value creation, potentially hindering sustainable economic growth.
This record trade deficit underscores the need for Thailand to diversify its trade partners and enhance domestic value addition to mitigate vulnerabilities arising from global trade uncertainties.
Thailand can take several strategic steps to reduce its trade deficit, particularly with China. Here are some key approaches:
1. Diversifying Trade Partners
- Strengthen trade agreements with ASEAN, the EU, and India to reduce reliance on Chinese imports.
- Expand exports to emerging markets with high demand for Thai products.
2. Boosting Domestic Production
- Invest in local manufacturing to reduce dependence on imported machinery and components.
- Provide incentives for Thai businesses to produce high-value goods domestically.
3. Enhancing Export Competitiveness
- Improve product quality and innovation to make Thai exports more competitive globally.
- Offer tax breaks and subsidies to exporters in key industries like electronics, textiles, and agriculture.
4. Strengthening Trade Policies
- Implement anti-circumvention measures to prevent trade rerouting by foreign firms.
- Negotiate fairer trade agreements to reduce tariff and non-tariff barriers.
5. Encouraging Foreign Investment
- Attract foreign direct investment (FDI) in sectors that boost exports and reduce import dependency.
- Promote joint ventures with international firms to develop local industries.
6. Leveraging U.S. Trade Relations
- Increase imports from the U.S. in key sectors like agriculture and energy to balance trade.
- Support Thai businesses investing in the U.S., particularly in digital technology and infrastructure.
Looking ahead, the second half of 2025 will be crucial as the U.S. finalizes its tariff structure. Given that the U.S. is Thailand’s largest export market, accounting for 19% of total exports, any uneven tariff policies could affect Thailand’s competitiveness and disrupt supply chains.
