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Thailand

Auto parts makers fretting over Trump trade war

The Thai Auto Parts Manufacturers Association (Tapma) is concerned about a global trade war sparked by tariffs from US President Donald Trump, although the country's auto parts shipments have yet to be affected

President Achana Limpaitoon said the US is the top importer of Thai auto parts.

Last year, shipments to the US accounted for 14% of total exports, rising 20.6% to US$2.78 billion (86.5 billion baht).

The US has imposed tariffs of 25% for steel and 10% for aluminium.

Those two products are raw materials for auto parts.

"We will monitor the effects on the global industry, but Thailand is expected to see a limited impact because the country is not one of eight major producers of steel and aluminium," she said.

"But Tapma is concerned as we expect the US will soon issue more tariffs that could affect our exports, as the country is concerned with its high trade deficit."

Mrs Achana said Tapma is worried that additional US tariffs could impact the global economy, making it more unstable.

For 2018, Tapma forecasts auto-parts exports will grow by another 10% thanks to demand from five countries -- the US, Japan, Indonesia, Malaysia and China.

Tapma reported that overall auto-parts shipment in 2017 rose by 15.5% to $19.8 billion.

Mrs Achana said that growth in shipments was in line with global demand.

The US, for example, has imported $1.812 billion baht in tyres from Thailand, representing 65% of the total.

She said direct shipments from China are subjected to hefty anti-dumping duties in the US, prompting many China tyres makers to run their production facilities in Thailand instead.

"Last year was great for Thailand's auto parts shipments, diverging from the country's car exports, which saw a contraction," said Mrs Achana.

Tapma also expressed concerns over the transition to electric vehicles (EVs), saying the government has no backup plan to help engine, transmission, brake and exhaust pipe manufacturers who will be impacted by the shift.

Kovit Wongkolkitslip, vice-chairman of Tapma, said half of the 2,000 producers operating in Thailand will disappear over the next decade, largely because of EV expansion.

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