The US tariff of 12.5% imposed on Thailand could weaken export competitiveness and add pressure to economic growth in the second half, with further US trade measures still looming, warns Asia Plus Securities (ASPS).

Therdsak Taveeteeratham, executive vice-president at ASPS, said the export sector faces growing uncertainty after the US introduced new tariffs under its Section 301 trade measures, raising concerns over the country's competitiveness despite a strong recent export performance.

The 12.5% rate is higher than the 10% levy imposed on several regional peers such as the Philippines and Malaysia. The new tariffs could slow Thailand's export growth in the second half of the year, he noted.

"The higher tariff burden could erode Thailand's competitive position in key export markets and slow export growth during the second half of the year," said Mr Therdsak.

In addition, the brokerage said Thailand's expanding trade surplus with the US increases the risk of additional US trade moves.

"Thailand's increasing trade surplus with the US requires vigilance for potential 'excess production' tariffs from the US, which could pressure the shipment sector," noted ASPS.

The brokerage advised investors to monitor potential tariffs targeting products linked to excess industrial capacity, which Washington has yet to announce and could create further headwinds for Thailand's export-driven economy.

ASPS said the sectors most exposed to the new tariff are pet food, processed food, beverages and electronics.

On the other hand, several major export categories were exempted including oil, natural gas and fertiliser products the US imports in large volumes, providing relief for energy companies such as PTT, PTT Exploration and Production (PTTEP), Thai Oil (TOP), IRPC and Bangchak Corporation (BCP).

Products already covered under Section 232, including automobiles, steel, aluminium and copper, are also excluded from the latest tariff measures. The exemption benefits steel processors and pipe manufacturers.

SOLID GAINS

The Commerce Ministry recently reported exports surged 20.8% year-on-year in June, exceeding the market consensus of 15.2%, while imports jumped 50.3%, well above expectations of 35.8%.

The import growth resulted in a trade deficit of US$6.57 billion.

Several export categories continued to post solid gains. Pet food exports rose 22.3%, extending growth for a 10th consecutive month, while rubber exports increased 12.5%, marking their first expansion in 14 months.

Processed chicken exports climbed 6.1%, recording a seventh straight month of growth.

KGI Securities (Thailand) also cautioned investors to monitor the latest US tariffs related to Section 301.

According to KGI, Thailand's export structure remains highly dependent on the US market, now accounting for 26.3% of total exports.

Excluding oil-related products, gold and strategic materials, June exports would have expanded by 23.1% year-on-year, noted the brokerage.

Electronics exports surged 66% year-on-year, with the "other electronics" segment skyrocketing 118%, followed by computer, equipment and components gaining 57%.

If this solid growth continues, it will be the result of technological adoption and the impact from relocation based on geopolitical risks, noted KGI.