Planned U.S. tariffs on Chinese imports are expected to boost containerized imports from Vietnam, Thailand, and South Korea, according to Linerlytica.
Vietnam’s containerized exports to the U.S. surpassed two million TEUs in the first 10 months of 2024, doubling 2017 levels, and is a 41% year-on-year (y/y) rise in Q2, 2024. Vietnam’s appeal comes from its skilled workforce, low costs, and stronger ties with the U.S.
Thailand’s U.S.-bound exports have tripled since 2017, reaching 900,000 TEUs by October 2024, a 25% y/y increase which has been largely driven by food and farm products. Meanwhile, South Korea’s exports to the U.S. exceeded 1 million TEUs this year, up from 600,000 TEUs in 2017. Major export categories include appliances and machinery.
Though China’s share of U.S. imports fell from 70.4% in 2017 to 58.9% in 2024, it remains the largest origin country for containerized imports, although Vietnam, South Korea, and Thailand are gaining market share.
Linerlytica noted the planned tariff hikes are focused on Mexico and Canada and have a limited impact on maritime traffic to the U.S. Further, the 10% tariff on Chinese goods is lower than previously proposed, with no indications of a blanket tariff on all imports into the U.S. “This could boost the prospects for Asian exports, especially for Vietnam, South Korea, and Thailand which have enjoyed the biggest gains in the past six years,” Linerlytica said.
Source: The Loadstar
Thailand’s strengths come from combinations of investment policies such as for EV cars and electronics, modern and efficient infrastructure, large electric power reserve, internet and 5G coverage, data centers, and importantly, complete supply chain clusters to ensure exported products have a high percent of local content.
This will become a key aspect moving forward as no tariff barriers are expected to be applied in some major destination markets based on country of origin.
Thailand now has Free Trade agreements with 19 partners and recently reached an agreement with the European Free Trade Association (EFTA) - Iceland, Liechtenstein, Norway and Switzerland - set to be signed in January 2025. Negotiations with the European Union and the United Kingdom are also underway.
Changes in the global supply chain and with Southeast Asia's population nearing 700 million, Thailand and Southeast Asia are poised to grow as both a trade hub and a consumer market. With our industry leading network of direct LCL consolidation services, Air and FCL, we are ready to support you.
