Trade wars are a natural part of politics and, in turn, economics. Although the current back-and-forth between the US and China is dominating the headlines, disputes have always had an impact on national economies.
In fact, to show the significance of political wrangling on global trade and financial markets, DailyFX has created a historical overview of trade wars. Charting the impact of liberalised trading between European nations in 1913 to Donald Trump’s 2018 tariffs, the report is a neat review (see infographic below) of how politics affects trade.
With that being the case, the history of trade wars should give us some insight into how Thailand and other parts of Asia may be affected by the US/China trade war. In the US, not all businesses have seen an uptick in revenue since during the trade war.
Despite Trump suggesting that his country is in a “very strong” position, companies such as Apple have seen stocks drop by 10%. Extrapolating from this, Dow Jones analysts currently have a bearish rating. By using the top 30 companies in the US as a barometer for national economic strength, it appears as though the trade war isn’t just hurting China.
Trade Wars Have Winners and Losers
However, if we’ve learned anything from trade wars of the past, it’s that some clouds have a silver lining. In other words, there are often positives to come out of trade disputes.
Naturally, the most important positive is that nothing lasts forever and the relationship between the US and China is likely to improve.
However, in the short-term, increased tariffs on China could push business towards other parts of Asia. As detailed by CNBC, Thailand could emerge a “winner” in the automotive industry if Chinese manufacturers are squeezed.
The US is the largest auto parts consumer so tariffs on Chinese firms will cause the top American brands to look elsewhere. One of those countries could be Thailand.
According to the Thailand Board of Investment, the country’s automotive industry has developed significantly over the last 50 years. As well as contributing 12% to Thailand’s GDP, the sector is now the largest producer in Southeast Asia and puts out more than 1.9 million vehicles per year.
Closed Doors Open New Opportunities for Thailand
With its prowess in the automotive industry set, Thailand would be the natural alternative for US manufacturers in the wake of the current trade war.
In that context, Thailand stands to win as China loses.
However, what the latest analysis demonstrates is that trade wars aren’t always bad. Economies have to continue moving forward, regardless of how they do it. This means that new doors always open as others close.
The US/China conflict has shown this but it’s always been the case throughout the history of trade wars. Indeed, if we go back to 1950, trade between the US and China was frozen.
The end result was the latter strengthened its ties with neighbouring regions while the US looked towards Europe.
Although trade wars have casualties, the fallout isn’t always as negative as the media makes it seem.
For Thailand, tensions between China and the US could actually have a positive effect, proving once again that trade wars are always a matter of perspective.
Google shuts down Huawei’s access to Android updates after US blacklist
Holders of current Huawei smartphones with Google apps, however, will continue to be able to use and download app updates provided by Google, a Google spokesperson said
Google has reportedly suspended some business with Huawei following the Trump administration’s blacklist of the Chinese tech giant. This means Huawei will lose access to updates on the Android operating system for future devices.
Thailand’s export growth expected to drop to 0.5-1%
Thailand’s export growth is expected to drop to 0.5-1%, a record low in four years as Thailand’s export sector is believed to be affected by trade war between the United States and China.
Thailand not significantly exposed to BRI-related macro-stability risks
Moody’s Investors Service says that China’s (A1 stable) Belt and Road Initiative (BRI) — through investments in large transportation and energy projects — helps to expand productive capacity by closing critical infrastructure gaps.(more…)
Thailand expands palm oil and rubber markets to India
India is the world’s largest consumer of vegetable oil, consuming some 12 million tons of vegetable oil, 70% of which...
How Competitive Gaming Can Become More Popular in Thailand
Compared to South Korea and other Southeast Asian countries such as the Philippines and Indonesia, Thailand lacks support for competitive...
Thai shipping company (VL) enters Market for Alternative Investment (mai)
The Thai shipping company has a market capitalization at its initial public offering (IPO) of THB 1.40 billion (approx. USD...
TTM to focus on “Making the World Better Place through Travel”
Under the theme of “Making the World a Better Place through Travel”, the TTM Talk will feature a line-up of...
Thai Economy likely to miss the 3.5% growth target
Deputy Prime Minister Somkid Jatusripitak said the global economic slowdown hasweakened exports and reduced domestic consumption
- Tech1 week ago
Thailand to use Biometrics scan to identify travellers
- Tourism2 weeks ago
Thailand extends free visa-on-arrival until 31 October 2019
- Business2 weeks ago
Political uncertainty weighs on Thailand’s consumer confidence
- Property2 weeks ago
Property slowdown looms over Thai market
- Business1 week ago
Thailand cooperates with Indonesia to push creative industries
- Corporate1 week ago
Challenges and opportunities await Thai businesses to reduce plastic use
- Corporate1 week ago
Flexible workspace key role in company’s success
- Business1 week ago
Thailand to become 4th largest production base for EV batteries in Asia