Global and Thai stock markets experienced a short-term rebound after US President Donald Trump announced a decision to delay the implementation of new import tariffs. The announcement eased concerns over escalating trade tensions, but analysts have urged investors to remain vigilant as the policy landscape continues to evolve.
On January 20, West Texas Intermediate (WTI) crude oil prices fell following Trump’s statement about signing an executive order to declare a national energy emergency on his first day in office. The order aims to expedite oil drilling, pipeline construction, and refinery development.
Oil prices also faced pressure after Houthi rebels declared they would limit attacks on merchant ships in the Red Sea, targeting only vessels linked to Israel. The group emphasized adherence to the Israel-Hamas ceasefire agreement to avoid further hostilities.
In foreign policy, Trump has advocated using revenue from tariffs to bolster the US economy. However, he stated that any tariff hikes pledged during his campaign would proceed cautiously, allowing time for impact assessments.
Asia Plus Securities (ASPS) analysts noted that the tariff delay, coupled with strong US corporate performance, has boosted short-term market sentiment. They projected the S&P 500 index to range between 5,700 and 6,100 points. Meanwhile, the Thai stock market benefitted, with the SET index closing at 1,359.68 points in the morning session, a 0.53% increase, supported by foreign fund inflows and robust banking sector earnings.
ASL Securities observed that Trump’s gradual policy rollout has eased earlier investor concerns. Key measures, including a 25% import tax on Canadian and Mexican goods and a 10% tariff on Chinese imports, are scheduled to take effect on February 1.
Trump’s policies, often referred to as “Trump 2.0,” are expected to reshape global supply chains and impact Thai exports, particularly in electronics, rubber, and agricultural goods. While higher tariffs on Chinese goods could slow China’s economy, Thailand faces risks from increased competition in Asian markets.
The Fiscal Policy Office (FPO) has advised Thai manufacturers to focus on high-value products like electronic components and clean energy solutions. Diversifying export markets and negotiating new trade agreements are also recommended strategies to mitigate the effects of US protectionism.
Director-General Pornchai Thiraveja highlighted Trump’s “America First” approach, which aims to protect domestic industries and address trade imbalances. The strategy includes encouraging US companies to repatriate production and reducing reliance on foreign imports in key sectors such as energy.
For Thailand, the FPO suggested leveraging opportunities to export substitute goods to the US, including semiconductors, steel, and agricultural products. To remain competitive, Thailand must enhance labour development and streamline investment processes in high-tech industries.
Thailand’s tourism sector, accounting for only 2.9% of US visitors in 2024, is expected to see limited direct impact from US policies. However, the revival of the US economy could attract more American tourists. Upgraded infrastructure, digital payment systems, and cybersecurity measures are likely to bolster Thailand’s appeal to foreign visitors and investors.
Efforts to improve infrastructure, create specialised economic zones, and promote clean energy industries are seen as crucial for attracting investments and ensuring long-term economic growth. The Thai government has also emphasized positioning the country as a financial hub to strengthen its regional and global standing.
In his inauguration speech, Trump heralded the beginning of a “Golden Age of America,” reaffirming his commitment to policies that prioritise US trade interests. Analysts suggest that the ripple effects of these policies will continue to shape global markets, including Thailand’s, in the months ahead.
