Election outcome may ease trade tensions - Bangkok Post
The Thai Chamber of Commerce has expressed expectation the outcome of the US midterm elections would help restore the balance of power in the the major economy, though it is monitoring global trade policies and energy prices.
Poj Aramwattananont, the chamber's chairman, said the results of the Nov 3 election were expected to create a better balance between the executive and legislative branches in the United States, enhancing oversight and checks and balances in formulating key policies, particularly those related to the economy, budget and international relations.
However, as US President Donald Trump continues to hold executive authority, it remains essential to monitor whether the political shift will result in policy adjustments or greater compromise between the two parties, he said.
Regarding global trade, the chamber predicts the election may influence the direction of US trade policy, particularly import tariffs, trade barriers and the restructuring of global supply chains.
While Congress is expected to exercise greater oversight, it is too early to assume that trade measures will be relaxed immediately, according to the chamber's assessment.
Economic and technological competition among major powers, as well as efforts to promote domestic industries, remain key priorities for both parties, said Mr Poj.
Meanwhile, energy prices could ease if political changes foster greater reliance on diplomacy and negotiations to ease tensions in the Middle East, which would reduce pressure on global oil prices, he noted.
"A sustained easing of tensions would benefit Thailand by lowering production and transport costs, easing inflationary pressures and supporting consumer purchasing power. However, we need to monitor the US stance and geopolitical developments," said Mr Poj.
As the US is a major export market and strategic trading partner for Thailand, he advised businesses to watch developments in US trade policies, including tariff measures, rules of origin and investigations into trade circumvention.
Krungsri Securities (KSS) viewed a "Blue Sweep" as having some positive implications for Thailand, as tariff negotiations with the Trump administration could become easier with Democrats taking control of Congress.
Democrats now have greater power to scrutinise war-related policies and impose budgetary constraints, said the brokerage.
"There is a greater possibility of trade negotiations, as many within the Democratic Party view Trump's import tariff policies as driving higher living costs," said Koraphat Vorachet, assistant managing director and head of research at KSS.
"This may put pressure on the administration to return to the negotiating table with trading partners."
Given that Trump retains significant authority over trade policy, import tariffs cannot be easily rescinded, noted Mr Koraphat, adding trade-related volatility is expected to decrease in the medium term.
