Thailand, with the rest of Southeast Asia, has obtained temporary relief when US President Donald Trump chose to delay her “Release day“90 -day prices. Now, exports linked to the country only have a rate of 10%, as opposed to 36% threat by Trump.
Asian markets have made a wild tour since Trump first unveiled his reciprocal prices on April 2, falling and increasing according to the president’s statements. The reference index of Thailand dropped 9% between April 2 and 9, only to rally after Trump announced his price break. However, the index has not yet recovered from the success of the “Liberation Day”.
“We thought that the reciprocal prices were excessively high,” said Victor Cheng, CEO of Delta Electronics Thailand last week, before Trump announced his price break.
American actions caused “anxiety and great concern,” said Cheng, but noted that customers had not yet changed or canceled orders due to prices and rather adopted an attitude of waiting. Cheng added later, after Trump interrupted his prices, that customers use the 90 -day break on reciprocal prices to “refuel”.
The CEO also explained why its American customers, not its business, “will have to support the additional price in addition to the original selling price”. He underlines that most of the products of Delta Electronics Thailand are classified as “free on board”, which means that the responsibility passes by the seller – his company – to the buyer – the American customer.
Who pays the prices is a major political point in the debate on Trump’s trade policy, the president and his supporters claiming that the government or the strange business pay prices. Most trade professionals note that, in fact, it is the importer who pays: he can then pass some, if not all, from the additional cost for end consumers. (Large importers, like Walmart, could also be able to force foreign suppliers To take a haircut on the price)
However, Cheng feared that steep American prices still indirectly affect her business, placing additional charges on his customers and stimulating inflationary pressures.
“The prices will certainly have a certain impact. A slight level will be ok … but high prices beyond 15% will be difficult to take by a single party and will cause disturbances,” said Cheng in a follow-up conversation after Trump’s price break.
Chen noted that, in the days following the “Liberation Day”, the government of Thailand had contacted industry associations and sole proprietorships to understand how prices would affect their business. He predicted that Thailand would reduce prices on American products and buy more American products, while coordinating with its colleagues governments of Southeast Asia to negotiate with the United States as a block.
Thailand will send a delegation to the United States Start trade negotiations Next week, the government announced on Monday.
Focus on electric vehicles and data centers
Delta Electronics Thailand manufactures and distributes electronics, namely the power components, which are used in elements such as electric vehicles and data centers. The company is currently working with European and American manufacturers, but Cheng said that Thailand Delta Electronics is starting to explore work with manufacturers of Chinese electric vehicles who have set up a manufacturing capacity in Thailand.
The adoption of the EV increases in countries like Thailand, Malaysia and Singapore, partly due to government incentives and the beginnings of affordable Chinese manufacturing cars. Southeast Asia turns out to be a attractive Market for Chinese car manufacturers, due to its proximity to China and its more suitable political position in Beijing.
Electric cars represented 33.6% of all new car registrations in Singapore last year, against 18% in 2023, according to government data. In neighboring Malaysia, sales of electric vehicles jumped 19% to break 45,000; EV sales have more than doubled in Indonesia to reach 43,000 units.
Cheng was optimistic that the Delta Electronics Thailand was going to be able to exploit this expanding request.
“Here in Southeast Asia, we have had some success with EV Chargers. We see the sales of this – whether AC or DC – gradually growing here, “said Cheng.
Regarding its data center activity, Delta Electronics Thailand said that US companies are an important clientele but have refused to give specific names beyond the leader in the NVIDIA fleas.
What is Delta Electronics Thailand?
Delta Electronics Thailand is a subsidiary of Delta Electronics, a manufacturer of Taiwanese electronics. A booming electric electric vehicle industry has contributed to increasing revenues, profits and stock prices, which, at some point, has helped make the subsidiary more precious than its parent company.
Delta Thailand Electronics also spent a large part of 2024 as the most precious company in Thailand, with a cutting -edge market value of approximately $ 64.1 billion last November.
However, Delta’s course of action has been on the slide since then, in particular after the company has announced profits below them in mid-February. The company’s shares have lost more than 50% of their value since the November summit. The whole dropped a little more than 27% over the same period.
Yugi Takeshima, Maybank Securities research analyst, warned in a March report that the cost increase and uncertainty about how a new global minimum tax on business benefits could serve as a wind contrary to the growth in profits.
The minimum global tax aims to discourage multinational companies from reserving excessive profits in low -tax jurisdictions, guaranteeing companies a minimum level of tax in each jurisdiction in which they operate.
Delta Electronics Thailand was previously subject to a tax of 5.5% in 2023. This will increase to 15% from this year, Thailand imposed a tax “supplemented” in January while the country seeks to enter the organization of economic cooperation and development.
Cheng has previously commented The fact that the actions of Delta Electronics Thaic may have been overvalued, noting that the price / profits ratio had “crossed the roof”.
He reaffirmed this feeling in his conversation with Fortune And noted that the share price had become “a little too speculative”.
Cheng said he was focused on the “fundamental principles of companies” in the midst of the tariff situation. The revenues of Delta Electronics Thailand are always at a healthy level, he said, and increasingly increasing in annual shift. Income for 2024 reached 164.7 billion baht ($ 4.9 billion), an increase of 12.5% compared to the previous year. The turnover in 2023 of the company of 146.4 billion baht ($ 4.4 billion) was 23.5% higher than 2022 and was motivated by its segment of the mobility group (EV).
But even if EV growth moderates, Cheng remains positive on infrastructure linked to AI. At the start of the year, the company projected “two -digit income growth” driven by investments.
“The Build Out is a great impulse for the support of income this year and we also see a positive advantage for profits,” he said.
This story was initially presented on Fortune.com
