PATTAYA, Thailand – The first reaction in Bangkok to Trump's new international tariffs was to assume they were an April Fool's joke delivered a day late. The United States is Thailand's biggest export market and, if a deal can't be reached, billions of cash income in any currency you care to mention is at potential risk. The 36 percent tariff on imports to the US was much bigger than the Federation of Thai Industries predicted, but China, India, Vietnam and Cambodia amongst other Asian countries were also singled out.
One consequence, if the world chooses to retreat into 19th century trade wars, will be to send shocks to Asia's international travel ecosystem which leaves tourist cities such as Pattaya exposed. If world trade shrinks, business travel declines as reflected in Thailand's MICE conventions and exhibitions initiative which has to date been very successful in Pattaya. Then global mobility is suppressed as airlines reduce routes, the market for longterm visas becomes smaller and hotels see vacancies mushroom.
The worldwide holiday market also shrinks as it depends on discretionary income, that is what people have to spend after paying their bills. Tariff wars are usually accompanied by both unemployment and inflation, both of which discourage vacations abroad. Travel and Tour World is already predicting a negative impact on Asian beach resorts in Thailand, Vietnam, the Philippines and Cambodia as international numbers shrink. Cruises are another likely victim as cabins become harder to fill.
Pattaya may not be an industrial hub, but it is adjacent to the Eastern Economic Corridor (EEC), the advanced manufacturing and export base with infrastructure designed to attract international investors from many countries. In the past, the United States and the EEC have been linked through US investment in areas such as renewable energy and other strategic industries. US vice-president JD Vance has already ruled out that kind of international cooperation in future.
The Pattaya area has the second most valuable property assets in Thailand outside of Bangkok. The ongoing building program of luxury condominiums and gated estates assumes an ever-expanding number of rich expat and Thai communities. But there is also huge investment being poured into neon-lit entertainment districts across the city. In the past, Pattaya has weathered many challenges, most recently military coups and the covid crisis. But Pattaya's greatest challenge for the future could be unfolding right now before our very eyes.
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