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.

whats in store for the future of thai auto industry
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.

us china boxing
For Thailand, tensions between China and the US could actually have a positive effect

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. 

About the author

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

You May Also Like

China overtakes Japan as world’s top auto exporter

New energy vehicles accounted for roughly 40% of China’s overall auto exports. Tesla’s China arm was the top exporter of new energy vehicles at 90,000 units, followed by SAIC Motor’s passenger vehicle unit at 50,000 units, and BYD at 30,000 vehicles.

TAT launches new campaign to boost Chinese tourist confidence

The ‘Trusted Thailand, You Taiguo Yue Wan Yue Kaixin’ campaign is expected to boost awareness of the safety measures for tourists and meaningful travel experiences in Thailand through contents shared with followers of the participating KOLs via various online community platforms, including Weibo, WeChat, Little Red Book, and Bilibili.

China’s BYD surpasses 5 million cars sold

It took BYD 13 years to sell its first million vehicles, but only six months to double that number, and an additional nine months to reach five million.