Bangkok: This week, the world is facing a clearly more protracted and complex situation, especially in the Strait of Hormuz, where Donald Trump recently declared his desire to make the area US territory, to which Iran immediately retorted that this policy is absurd.
According to Thai News Agency, conflicts in the Middle East have drastically reduced shipping through the Strait of Hormuz, from over a hundred ships per day to only 15-20. This has caused Brent crude oil prices to surge back to $88-89. Dr. Supavud analyzes that global energy prices are highly correlated with Thailand's energy imports, at a rate of 83.4%. Calculations show that in a year without problems, Thailand's energy import costs are approximately 7.4% of GDP. However, if oil prices remain at $90, Thailand would have to import more than 10% of GDP in energy, equivalent to an additional 3% of GDP loss. This is a very severe figure considering Thailand's projected GDP growth of only 2.3% this year.
A secret letter from Washington is reportedly warning against double-dealing in the technology dimension. The US State Department is drafting a letter to 35 AI allies, reminding them to "choose a side" and refrain from collaborating with others, particularly China. This comes after Kazakhstan's dual alliances with the US and a Chinese-led global AI organization prompted the US to tighten control over its allies. Thailand also needs to exercise caution on this issue.
Meanwhile, Thailand is stalling in the race for data sovereignty with Elon Musk's Starlink dominating the low-orbit satellite market. Malaysia, Indonesia, and Vietnam have granted Starlink 100% operational ownership, but Thailand faces decision-making challenges due to internal conflicts within the NBTC board, potentially disadvantaging the country in attracting global investment.
Indonesia's aggressive move to lure Toyota away from Thailand highlights issues in the automotive industry. With a larger and growing domestic market, Indonesia presents an attractive alternative. Dr. Supavud revealed that past FTA negotiators mistakenly categorized electric vehicles as golf carts, resulting in zero tariffs for Chinese EVs, subjecting them to only a 2% excise tax, while Japanese vehicles face much higher taxes. This disparity may prompt Japanese automakers to relocate their production bases.
The US report, "The Great Transshipment Scam," categorizes Thailand in Tier 2, indicating it may be aiding China in transiting goods to avoid tariffs. Without a clear agreement with the US, Thailand could become a target for trade restrictions, unlike Indonesia and Malaysia, which have secure agreements.
In summary, Thailand is currently facing a geopolitical storm pressing from all directions, including rising living costs due to energy, technological choices, and the need to maintain key industrial bases. The major trade negotiations with the United States at the end of August are therefore a crucial turning point that the government and businesses must closely monitor.