Abstract
Intensifying geopolitical tensions are leading to economic decoupling, with countries like the US and China emphasizing self-reliance and allied partnerships to enhance national security. This trend is expected to lead to deglobalization and a shift in international trade patterns. Countries with a neutral stance, like Thailand, may benefit from trade diversions. However, different sectors within Thailand will be affected differently, with some benefiting and others facing risks from increased competition. To seize on opportunities, Thailand needs export promotion policies and proactive business adjustments tailored to each sector’s specific needs.
Summary
Intensifying Geopolitical Tensions Fuel Economic Decoupling
The erosion of trust between major economies like the US and China is heightening geopolitical tensions and straining international relations. Nations are increasingly prioritizing self-reliance or reliance on allied nations while restricting benefits to perceived threats. Policies in the future are likely to focus on trade and investment restrictions to bolster national security through strengthened domestic supply chains and allied networks, leading to deglobalization and enhanced decoupling.
New Opportunities Arise in the Global Trade Arena
An analysis by SCB EIC highlights the impact of intensified economic decoupling on international trade patterns. Countries with differing stances will reduce trade reliance on each other and turn to nations with neutral positions. Thailand, maintaining neutrality, is well-placed to benefit from trade diversions away from more polarized countries.
Differing Impacts on Thai Business Amid Shifting Trade Landscape
While Thai exports may see gains from the evolving trade scenario, various manufacturing sectors will be affected differently. Sectors like computer/electronics and automotive may benefit, whereas textiles and electrical equipment face risks from competition. To capitalize on this, Thailand must align export promotion policies and business strategies to optimize sector-specific opportunities and challenges.
Source : Seizing the opportunities for Thai industry amid more severe decoupling
