President-elect Trump has invited Robert Lighthizer to resume as U.S. Trade Representative, prioritising protectionist policies. Thailand, with the thirteenth-largest U.S. trade deficit, faces inevitable scrutiny, especially over its role in facilitating indirect Chinese exports.
Reports that Trump has invited former trade representative Robert Lighthizer to take up his former role have highlighted the priority being placed at President-elect Donald Trump’s Mar-a-Lago estate as he plans his return to the Oval Office in January. Firstly, Thailand, in 2023, had the thirteenth-largest trade deficit with the United States compared to any other country in the world. Secondly, there has been mounting evidence since the U.S.-China trade war began in 2017 that China is using Thailand as an offshore base for exports to avoid U.S. tariffs.
Reports that President-elect Donald Trump has tapped Robert Lighthizer to resume his role as U.S. Trade Representative signal that trade policy will be a top priority for the incoming administration.
Lighthizer, a staunch protectionist who oversaw the U.S. trade war with China, is likely to raise concerns.
America’s trading partners, especially nations with large trade imbalances like Thailand, will be particularly concerned.
Thailand’s trade relationship with the U.S. has drawn increasing attention. In 2023, Thailand exported $56.37 billion in goods, leaving it with a trade deficit of $40.27 billion.
In contrast, Malaysia’s deficit is $26.705 billion, while that of France is only $13.393 billion.
Thailand’s trade deficit with the U.S. improves slightly but its role as an intermediary for Chinese goods grows
While Thailand’s trade deficit showed a slight improvement from $41.9 billion in 2022, exports to the U.S. fell by 6.8%. Moreover, Thai imports from the U.S. dropped significantly by 15.86%, from $18.6 billion to $15.65 billion.
The reasons behind these shifts are complex, but a key factor is Thailand’s role as an intermediary for Chinese products.
In many cases, Chinese goods are reshored to Thailand before being exported to the U.S., allowing companies to bypass tariffs. For example, fish products are processed in Thailand and then shipped to the U.S. to avoid tariffs on Chinese exports.
With the U.S. administration likely to continue its protectionist stance, Thailand’s role as a gateway for Chinese goods may be scrutinised more closely.
Thailand’s large trade deficit with the U.S. makes it a potential target for protectionist policies
Thailand’s large trade deficit with the U.S. now ranks as the thirteenth highest after India’s, making it a potential target for new trade measures. The top twelve countries are China, Mexico, Vietnam, Germany, Japan, Canada, Ireland, South Korea, Taiwan, Italy and India.
The U.S. deficit with India stands at $43.5 billion, highlighting the trade imbalances Trump’s administration may prioritise addressing.
Robert Lighthizer’s potential reappointment as U.S. Trade Representative underscores the importance of protectionist policies in Trump’s economic agenda.
Lighthizer played a central role in initiating the U.S. trade war with China. He is known for his hawkish stance on tariffs and trade imbalances.
His influence in shaping U.S. trade policy could significantly impact countries like Thailand, which rely on exports to the U.S. and have large trade deficits.
Lighthizer’s return to the trade representative role could lead to more aggressive trade measures
The reappointment of Lighthizer would likely concern all U.S. trading partners including China. At this time, there is confirmation that he will accept the role. Indeed, it is reported he had been hoping to be appointed Commerce Secretary.
During his tenure, tariffs on billions of dollars in imports were implemented, including products from American allies.
Lighthizer has long been critical of international trade bodies like the World Trade Organization (WTO). He has called it a “mess” and accused it of failing to protect American interests.
Lighthizer’s career includes advocacy for protective measures against Chinese imports as a lawyer for the U.S. steel industry.
His efforts led to securing tariffs on steel imports during George W. Bush’s administration.
As Trade Representative, Lighthizer shifted U.S. trade policy from a free trade approach to one focused on reshoring American manufacturing and protecting domestic jobs.
His reappointment could signal more aggressive trade measures, particularly as Trump continues to emphasise U.S. trade deficits.
Lighthizer has been a vocal critic of free trade agreements. He has called the U.S. trade deficit “alarming.”
His writings in the Financial Times reflected his view that the U.S. must address a “seriously failing” trade system that harms American workers.
Thailand faces pressure as U.S. seeks to reduce trade imbalances through protectionist policies
Thailand’s trade relationship with the U.S. is complicated by the fact that a significant portion of its exports consists of goods originally sourced from China.
This practice of reshoring has allowed Thai exporters to bypass tariffs while benefiting from access to the U.S. market.
However, as the U.S. scrutinises such trade practices, Thailand may face more pressure to reform its trade policies.
The U.S. trade deficit with Thailand reflects broader trends in the global economy, where trade imbalances are becoming a focal point for protectionist policymakers.
Lighthizer’s return to the role of U.S. Trade Representative suggests that Trump’s administration will continue to prioritise reducing trade deficits.
This includes imposing tariffs on countries with large surpluses. Thailand’s position as a key trading partner in Southeast Asia means it could be directly impacted by new tariffs or trade barriers.
Thailand must balance trade relations with the U.S. while managing its own economic interests
The Thai government may need to navigate a delicate balance between maintaining trade relations with the U.S. and managing its own economic interests.
Thailand has seen a slight reduction in its trade deficit with the U.S., but both exports and imports are slowing.
Commerce Ministry bullish about exports under Trump but ‘America First’ surely spells challenges for Thailand
If the new administration pushes for further tariff measures or seeks to renegotiate trade deals, Thailand could face significant challenges in the global market. As President-elect Trump prepares to take office, his decision to reappoint Robert Lighthizer highlights that trade policy will be central to his administration’s agenda.
With Lighthizer at the helm, countries like Thailand must prepare for a more aggressive U.S. stance on trade.
Undoubtedly, the U.S. may seek to address its trade imbalances.
In turn, this may mean challenges and opportunities as Thailand deals with an emerging international trade landscape.
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