Impacts of trade and technology tensions: Evidence from Thailand

Juthathip Jongwanich

Development Policy Review, 2026, vol. 44, issue 3

Abstract: Motivation The trade and technology war between the United States and China poses significant challenges for small, open Asian economies like Thailand. Some argue that the policies driving this conflict present opportunities, including trade diversion and increased investment, particularly in the electronics sector—the centre of efforts to unwind economic interdependence. However, trade circumvention and domestic supply chain disruptions have emerged as threats that could outweigh the benefits. Determining whether threats outweigh the advantages requires systematic analysis. Purpose This study analyses the impacts of trade and technology war on Thailand, with a focus on three key areas: trade diversion; imports and supply chains; and trade circumvention, particularly within the electronics production chains. Approach and Methods This study uses detailed trade data at the six‐digit Harmonized System (HS) code level, investment information, and online business surveys from 2017–2024. To clearly assess the impact of the trade and technology war on Thailand, particularly in the electronics sector, the supply chain of electronic products in the country is identified and categorized into upstream, midstream, and downstream segments. The study explores input–output mapping for selected products to understand import structures and supply chain linkages. The Herfindahl–Hirschman index and intra‐industry trade index are also applied in the study. Findings The findings provide evidence of export diversion toward the US market, particularly in the downstream and midstream segments of the electronic supply chain. In the downstream segment, the shift was largely limited to market switching, while market expansion beyond the United States was observed in the midstream and upstream segments. The structure of Thailand's import partners has changed significantly, with China and Taiwan dominating the supply chain. The former dominates finished products, while the latter plays a leading role in parts and components. Stronger foreign investment and production capacity are observed in the midstream and upstream industries, while trade and free trade area utilization data suggest some trade circumvention, though the extent remains limited. Policy Implications The trade and technology war has reignited the need for Thailand to re‐evaluate a wide range of strategic issues. A well‐defined industrial policy, underpinned by coherent and coordinated strategies across government agencies, should be a top priority. Strengthening global and domestic supply chains, along with the restructuring of tariff and non‐tariff measures, should be another key area in reforming the country's policy. Regional cooperation, particularly within ASEAN/ASEAN+, is likely to become more significant than bilateral liberalization, especially amid the growing uncertainty of global trade policy.

Date: 2026
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