Chinese Imports Soar as Businesses Secure Raw Materials
Imports from China to Thailand reach all-time high during period of trade uncertainty and a three-month tariff truce agreement.
Thailand's trade deficit with China has skyrocketed to unprecedented heights during the first four months of 2025, with businesses scrambling to secure essential raw materials as global trade tensions loom, particularly in anticipation of potential U.S. tariff shifts.
According to the Ministry of Commerce's Trade Policy and Strategy Office (TPSO), Thailand recorded a staggering $19.23 billion trade deficit with China from January to April 2025. Imports from China totaled an eye-popping $31.56 billion, while exports amounted to a comparatively paltry $12.33 billion.
In April alone, Thailand's imports from China hit a monthly record of $8.82 billion, while exports to China reached a measly $3.55 billion, a trivial 3.2% increase year-on-year. Unsurprisingly, the resulting monthly trade deficit stood at a formidable $5.27 billion.
Electronics and Machinery Top the List
Among the top five import categories in April:
- Electrical machinery and parts: $1.67 billion (+110.6%)
- General machinery and components: $848.2 million (+37.8%)
- Home appliances: $658.6 million (+21.6%)
- Computers and related parts: $506.8 million (+35.1%)
- Chemicals: $496.8 million (-11%)
The surge in imports, particularly of machinery and electronics, speaks volumes about businesses stockpiling raw materials and components in preparation for potential global trade disruptions.
US Tariff Uncertainty Sparks Import Rush
Wisit Limluecha, Vice Chairman of the Thai Chamber of Commerce, pointed out that this surge in imports could very well be tied to export-oriented manufacturers trying to secure inputs amid anxiety over U.S. tariff policy.
With the U.S. recently imposing global tariffs and initiating a 90-day negotiation window, many countries, including Thailand, are bent on importing raw materials to beat potential cost increases. This trend is expected to continue through May 2025.
On the export side, Thailand's shipments to China have been impacted by a drop in fruit exports, attributed to weather-related declines in crop yields.
The Road Ahead: Navigating U.S. Tariffs
The second half of 2025 will be a critical juncture, as the U.S. finalizes its tariff structure. The U.S. is Thailand's largest export market, accounting for 19% of total exports, and any uneven tariff policy could disrupt Thai business and cripple its supply chains.
The Bigger Picture
While some economic analysts may be overly optimistic about April's strong export growth (10% year-on-year), the persistent trade deficit with China, particularly in electronics and home appliances, remains a grave concern. Much of the increase in exports is due to a low base effect and frontloading of orders by trading partners such as the U.S.
The rise in exports has not translated into corresponding increases in domestic industrial production or value creation, which could hamper sustainable economic growth. Some exports are merely pass-through shipments with no local value-addition, indicating tenuous links between export activity and domestic sectors.
In April, China's exports to the U.S. contracted, but its exports to other markets surged, reflecting China's rapid market diversification strategy. The export outlook for the remainder of 2025—especially the second half—faces significant downside risk, mainly due to uncertainties surrounding U.S. tariff policies.
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- The surge in Thailand's imports from China, particularly in electronics and machinery, is likely a result of businesses stockpiling raw materials and components due to anxiety over possible U.S. tariff policy.
- With the U.S. imposing global tariffs and initiating a 90-day negotiation window, many countries, including Thailand, are predicted to continue importing raw materials to beat potential cost increases.
- The persistent trade deficit with China, particularly in electronics and home appliances, is a cause for concern, as it has not translated into corresponding increases in domestic industrial production or value creation, potentially hampering sustainable economic growth.
