China’s neighbor is cracking down on the influx of cheap imports

The Thai government has taken steps to stem the flow of cheap Chinese goods into the Southeast Asian country.

Local media reported that after the weekly cabinet meeting on Tuesday, ousted Thai Prime Minister Strettha Thavisin announced that the commerce ministry would lead the effort.

China is Thailand’s largest trading partner, with bilateral trade reaching $135 billion last year. But the influx of Chinese goods into the kingdom and other countries in the region has raised concerns about the impact on domestic markets and prompted governments to act.

Thailand’s trade authorities have been tasked with working with other government ministries and departments and the Royal Thai Police to develop a list of measures by the end of the month aimed at boosting the competitiveness of local small businesses.

Government spokesman Chai Wacharonke said the initiative was launched in response to a growing number of complaints from the private sector about illegal trading activities by foreign companies.

“These businesses have impacted SMEs (small and medium-sized enterprises) that are feeling the effects of e-commerce, both online and offline,” he said Bangkok Post Office quoted him as saying. “It turned out that there was an unusually high inflow of imported goods, and the value of e-commerce was estimated at 1.53 trillion baht (38.6 billion dollars).”

Trade Minister Phumtham Wechayachai said in a Facebook post on Tuesday that Thailand needs to adapt to the changing landscape of global trade and that new e-commerce taxes are on the table to ensure fair competition and prevent “damage to the domestic economy.”

He called the entry of Chinese e-commerce platform Temu into Thailand “both an opportunity and a challenge” for companies in Southeast Asia’s second-largest economy. Phumtham also said his ministry attaches “great importance” to finding opportunities for Thai entrepreneurs looking to enter large markets such as China.

The Chinese Embassy in Thailand did not immediately respond to a written request for comment.

The Thai government is looking at ways to support its SMEs, which account for 99 percent of activity and 35.2 percent of the country’s GDP, the Southeast Asia-focused news and analysis platform ASEAN Briefing reported earlier this year. Bangkok aims to increase that figure to 40 percent of GDP by 2027.

In July, a 7 percent VAT was introduced on imported goods worth less than 1,500 baht (about $43).

Thailand’s Constitutional Court voted Wednesday to remove Prime Minister Srettha from office over alleged ethics violations. Srettha appointed a minister who was previously imprisoned for trying to bribe a court official.

It is unclear what impact this will have on trade policy in the future, although Srettha’s Cabinet will continue to serve on an interim basis until parliament elects a new prime minister.