Thailand Ministry of Commerce is worried about the effect of U.S.-Mexico-Canada Agreement (USMCA) on Thailand, especially on the exports of vehicles, auto parts, and textile.
Under USMCA, car and trucks need to use 75% auto parts that are produced in these 3 countries in order to pass through the countries duty-free. This increase in percentage (from North American Free Trade Agreement (NAFTA)’s 65%) will reduce at least 20% of the 3 members’ auto part imports from all countries around the world including Thailand.
However, the ministry said that Thailand could be benefited from USMCA as the agreement might push those American carmakers to reduce their small sedan’s production capacity in USA and might import those small sedans more from its plants in other countries, such as Thailand.
Ford announced that the company will not produce small sedans in USA, but the company will instead, import them from Mexico and Thailand. The Thai ministry said that Ford might even consider Thailand to be the main production base of its small sedans in the future.
And for the U.S.-China trade war, the ministry said that Thailand will be benefited as well, as U.S. will reduce the import of tires from China and import the tires more from Thailand. This is because U.S. government will increase the import duty of tire from China to be 25% (from 10%), effective January, 2019.
(multiple sources on October 30, 2018)