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June 4, 2024

More Interest in Investing in Thailand Amid US-China Tensions

us tariff for china ev
June 4, 2024

Following the U.S. Government's decision to increase tariffs on imports of electric vehicles (EVs), solar cells, semiconductors, aluminum, and steel from China, Federation of Thai Industries (FTI) chairman Kriengkrai Thiennukul commented that Thailand can gain from the evolution of  US-China trade relations. Specifically, Chinese automakers, to avoid high tariffs, are expected to expand their activities in foreign markets, as well as relocate their production facilities to Asian countries, including Thailand. Kriengkrai noted that when the U.S. raised tariffs on air-conditioners imported from China, there was a resulting increase in demand for air-conditioning units from Thailand.
At the “BOI Symposium: EV Supply Chain Edition” on May 17th, all seven Chinese EV giants confirmed that Thailand would be their primary production base in ASEAN. The Board of Investment (BOI) is facilitating this production expansion by granting investment incentives to EV-related businesses, including battery production and charging equipment. Chinese businesses are not the only ones ramping up investment in Thailand, for several Japanese companies have expressed their interest in following suit. According to Prime Minister Srettha Thavisin, Mitsui & Co, Sony Corporation, and Nidec Corporation intend to expand production bases in Thailand, in areas including green packaging, biofuel production, and artificial intelligence. Sony Corporation executives briefed the Prime Minister about its plan to open a fourth factory at Bangkadi Industrial Park to produce semiconductor lasers, and Nidec Corporation discussed its plan to expand its investment in Thailand for manufacturing its new AI-enabled products.

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