Thai exports off to a strong start in 2026, but Trump-era trade tensions a worry

Thailand’s export sector has started 2026 on a strong note with a nearly 25 per cent year-on-year surge, but intensifying global trade frictions including renewed tariff threats from the Trump administration, raise doubts on sustaining the momentum.

Trump has become increasingly defiant after the US Supreme Court recently struck down the reciprocal tariffs he had announced early in his second term last year.

Double-digit surge in January

According to Thailand’s Trade Policy and Strategy Office under the Ministry of Commerce, exports in January 2026 were valued at US$31.57 billion (980.7 billion baht), a 24.4 per cent surge year on year, marking the 19th consecutive month of expansion.

Excluding oil-related products, gold and military goods, exports still grew a solid 20.9 per cent, underscoring broad-based strength, driven by:

● Demand for electronics and AI-related goods

Global demand for electronic products remained strong at the start of 2026, aligned with the worldwide transition toward AI technologies and accelerated digital infrastructure investment. Exports of computers, equipment and components jumped 68.2 per cent; telephones and components soared 195.4 per cent; printed circuit boards grew 10.9 per cent; electrical transformers and parts rose 32.2 per cent; switchboards and control panels climbed 43.6 per cent.

● Automobiles and machinery

Export of automobiles and parts increased 9.8 per cent, reinforcing Thailand’s position as a key regional manufacturing hub for vehicles and electrical appliances.

● Selected agricultural and food products

Although the overall agricultural and agro-industrial sector fell 1.8 per cent, several key products rebounded strongly with festive-season demand:

— Fresh, chilled, frozen and dried fruits were up 53.4 per cent

— Fresh, chilled and frozen shrimp were up 39.3 per cent

— Canned and processed fruits increased by 14.7 per cent

— Processed chicken was up 4.4 per cent

— Pet food was up 8.2 per cent

These gains helped generate income for Thai farmers, even as exports of some traditional staples such as rice, rubber and sugar declined.

Imports, however, rose even faster than exports—up 29.4 per cent to US$34.88 billion—resulting in a trade deficit of $3.3 billion in January. Still, the export upswing provided a significant cushion for overall economic activity.

Key export markets

Thailand’s January performance was especially strong in its primary markets.

Exports to the United States were up 43.1 per cent, driven largely by electronics, machinery and some high-value manufactured goods. The US remains a critical engine for Thai export growth, making Thailand particularly vulnerable to any escalation in US tariffs or barriers.

Exports to China were up 35.1 per cent with higher demand for electronics, intermediate goods and agricultural products. As China continues to invest in AI and digital infrastructure, this market will likely remain important for Thai tech-related exports.

Exports to the European Union rose by 17.8 per cent. The EU continues to be a key destination for Thai industrial and food products. Growth in this market helps diversify risk from over-reliance on the US and China.

Thai exports also saw robust growth within the region with exports to five ASEAN countries rising by 29.8 per cent, making up for an 8.7 per cent slump to CLMV (Cambodia, Laos, Myanmar, Vietnam).

Regional supply chains and intra-ASEAN trade remain strong, with Thailand benefiting as a manufacturing hub integrated into regional production networks.

Though Thai exports to Africa declined, there were solid gains in secondary markets such as Australia, the Middle East, Latin America and the UK, supporting Thailand’s diversification strategy, according to the Commerce Ministry.

Export outlook for 2026

The Commerce Ministry expects Thailand’s exports to stay on an upward trajectory through 2026, supported by several structural and cyclical factors.

Ongoing investment in AI data centers and digital infrastructure worldwide—particularly in North America and Asia—should sustain demand for Thai electronics, components and related industrial products.

Thailand’s comparative advantage as a stable manufacturing base and reliable food supplier will continue to underpin exports of vehicles, electrical appliances, and processed food.

Proactive efforts to expand into high-potential markets such as India, Latin America and the Middle East, together with benefits from newly implemented free trade agreements, are expected to enhance competitiveness and reduce dependence on a small number of markets.

At the same time, Thailand’s domestic growth remains subdued.

The International Monetary Fund (IMF) projects Thailand’s GDP will grow only 1.6 per cent in 2026—well below the global average—highlighting how crucial continued export growth will be for supporting the overall economy.

Why the momentum cannot be sustained

Some analysts do not share the optimism of the Thai Commerce Ministry.

“Exports surged in January mainly because of the Trump-era tariffs, which made Thai products cheaper than Chinese goods,” says Sompop Manarungsan, president of Panyapiwat Institute of Management.

“US importers turned to other countries, including Thailand, that could supply the same products as China.”

He noted that total trade value between the US and China fell by 18 per cent last year, while US imports from other countries increased.

“From now on, Thai export growth is likely to slow,” says Sompop.

“With Trump imposing a 15 per cent tariff on every country, no one has a clear advantage. Thailand will lose the edge it previously had over China, which faced much higher tariffs last year.”

He added that US importers may delay restocking in the hope that tariffs will fall well below 15 per cent after the 150-day period allowed under US trade law.

Kasikorn Research Center also believes the outlook for Thai exports depends heavily on future US tariff policy.

The research house pointed out that, following the Supreme Court ruling and Trump’s announcement of a 15 per cent worldwide tariff, no single country now has a clear edge.

At the same time, the recent appreciation of the baht is eroding Thailand’s export competitiveness.

Dangers of a large trade surplus

Senior executive vice president at Bangkok Bank, Kobsak Pootrakool, has warned that Thailand could become a target for President Trump, as Thailand’s trade surplus with the US rose to $71.8 billion last year from $54.4 billion in 2024.

Thailand has moved up from 11th place to seventh among countries having the largest trade surplus with the US.

Trump has vowed to impose higher tariffs on countries with large surpluses in an effort to reduce America’s massive trade deficit.

The World Trade Organization in January cut its forecast for global merchandise trade growth in 2026 to just 0.5 per cent, less than one-third of the previous 1.8 per cent estimate, citing the delayed but full impact of tariff hikes imposed by Trump.

The IMF in January expected world trade in goods and services to slow from 4.1 per cent in 2025 to 2.6 per cent in 2026.

Global GDP forecast

The IMF still sees global GDP growth at a relatively resilient 3.3 per cent in 2026, supported by AI-related investment, adaptive private sector and generally accommodative financial conditions.

This divergence—steady global GDP but weakening trade—implies that while global demand may not collapse, the trade channel through which Thailand benefits will face increasing headwinds.