World Bank Sees Thai Fiscal Risks Mounting Due to Spending Surge
The Southeast Asian nation can enhance fiscal resilience amid the rising spending by reducing regressive energy subsidies, raising tax revenue and accelerating public investments in infrastructure, new technology and human capital, the bank said in its Thailand Economic Monitor report released Friday.
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Grab is in ‘prime position' to support the transition to driverless cars, says CEO Anthony Tan
Autonomous vehicles are now a common sight, with robotaxis plying the streets of San Francisco, Los Angeles, Wuhan, and Shenzhen. Economies like Japan, Hong Kong, and the United Arab Emirates are also exploring their own autonomous taxi services. Singapore is no different. The government has been looking to launch driverless buses on its main island. WeRide already has a driverless bus plying a short route on Sentosa island, and the ride-hailing firm Grab recently launched a driverless shuttle service between the One-North metro station and its headquarters four kilometers away. The Grab-operated shuttle, which ferries employees back-and-forth between 2 p.m. and 4 p.m. each day, is just a pilot, yet CEO Anthony Tan sang the praises of AVs on an earnings call on Thursday. 'We are leaning heavily into the AV opportunity, or what we think of as driverless AV opportunity across Southeast Asia. We are in prime position to support the AV transition over the next few years,' Tan said in response to a question on the call about how quickly Grab anticipates a commercial launch of its driverless offerings. Grab's CEO elaborated that the company will continue to build strong relationships with global AV players and OEMs, and touted the platform's regional reach. Grab is present in eight countries across Southeast Asia. 'We have several pilots planned at the moment,' Tan said, including one with Autonomous A2Z, a Korean AV manufacturer. He said to 'expect to hear [about] more pilots,' which will allow Grab to understand the operational conditions for different driverless vehicle services throughout the region. While there are concerns that driverless taxis will eliminate jobs, some Southeast Asian transport operators say they struggle to find drivers to meet demand throughout the day. AVs could fill these supply shortages when there are fewer drivers on the road. Grab's earnings Grab reported a profit of $20 million for the quarter ended June 2025, reversing a loss of $68 million for the same period last year. Revenue grew by 23% year on year to reach $819 million, driven by gains in Grab's on-demand and financial services segment. The company's financial services segment, while starting from a lower base, was its fastest-growing division. Revenue in that segment grew 41% year on year to reach $84 million, while its loan portfolio grew by 78% to hit $708 million. Grab chief operating officer Alex Hungate was confident that Grab's loan book could exceed $1 billion by the end of the year, citing its strong product lineup. Loans can be a significant revenue driver for companies like Grab, as nontraditional lenders can charge higher interest rates to cover the increased risk of lending to underbanked customers. Grab shares, which are traded in New York, are up 0.6% in premarket trading. The company's shares are currently up 11.6% for the year thus far. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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16 hours ago
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Relief in Southeast Asia As Trump's Tariffs Level Playing Field
Southeast Asian countries breathed a sigh of relief on Friday after the US announced tariffs on their exports that were far lower than threatened and levelled the playing field with a rate of about 19 percent across the region's biggest economies. US President Donald Trump's global tariffs offensive has shaken Southeast Asia, a region heavily reliant on exports and manufacturing and in many areas boosted by supply chain shifts from China. Thailand, Malaysia and Cambodia joined Indonesia and the Philippines with a 19 percent US tariff, a month after Washington imposed a 20 percent levy on regional manufacturing powerhouse Vietnam, Southeast Asia - with economies collectively worth more than $3.8 trillion - had raced to offer concessions and secure deals with the United States, the top export market for much of the region. Its countries, many of them key players in the global supply chain, vied to stave off the prospect of losing market share to each other and of multinational firms shifting operations and orders elsewhere. Malaysia's Trade Ministry said its rate, down from a threatened 25 percent, was a positive outcome without compromising on what it called 'red line' items. Thailand's finance minister said the reduction from 36 percent to 19 percent would help his country's struggling economy face global challenges ahead. 'It helps maintain Thailand's competitiveness on the global stage, boosts investor confidence and opens the door to economic growth, increased income and new opportunities,' Pichai Chunhavajira said. The extent of progress on bilateral trade deals with the United States was not immediately clear, with Washington so far reaching broad 'framework agreements' with Indonesia and Vietnam, with scope to negotiate further. Pichai said Thailand was about a third of the way there. The United States on Friday slashed the tariff rate for Cambodia to 19 percent from earlier levies of 36 percent and 49 percent, a major boost for its crucial garments sector, its biggest economic driver and source of about a million manufacturing jobs. 'If the US maintained 49 percent or 36 percent, that industry would collapse in my opinion,' Cambodia's Deputy Prime Minister and top trade negotiator Sun Chanthol told Reuters in an interview. Status Quo In Thailand and Malaysia, business groups cheered a tariff rate that could signal a maintenance of the status quo between rival markets, among them beneficiaries of so-called 'China plus one' trade. 'It's very good - we're on par with Indonesia and the Philippines and lower than Vietnam ... we're happy,' said Werachai Lertluckpreecha of semiconductor manufacturer Star Microelectronics. Chookiat Ophaswongse of the Thai rice exporters association said the similar rate to Vietnam would maintain its share of the US market, while Wong Siew Hai, president of Malaysia's semiconductor industry association, said the latest tariffs would level the competition. 'I don't see the companies doing anything special. It will be business as usual for now, until they figure out what is the next best move,' Wong said. Much remains to be worked out by the Trump administration, including non-tariff barriers, rules of origin and what constitutes transshipment for the purposes of evading duties, a measure targeting goods originating from China with no or limited value added, where a 40 percent tariff would apply. Vietnam has one of the world's largest trade surpluses with the United States, worth more than $120 billion last year, and has been often singled out as a hub for the illegal re-routing of Chinese goods to America. It was a first-mover in trade talks and reached an agreement in July that slashed a levy from a threatened 46 percent to 20 percent, but concerns remain among some businesses that its heavy reliance on raw materials and components imported from China could lead to a wider application of the 40 percent rate. 'That is the real issue,' said one businessman in Vietnam, who asked not to be named to allow him to speak more freely. Andrew Sheng of the University of Hong Kong's Asia Global Institute said the similar tariffs mean Southeast Asian countries should be relieved that policy uncertainty was over for now. 'The tariff announcement looks like a classic Trump Art of the Deal deal - lots of hype and threats, and with one flourish, the other side feels that it has a reasonable deal,' he said. By Martin Petty, Chayut Setboonsarng, and Huey Mun Leong Learn more: Asia Factory Outlook at Lowest Since Pandemic on Trump Tariffs Manufacturers in Southeast Asia are less optimistic about future growth, despite recent improvements in output, amid tariff uncertainty.
Boston Globe
18 hours ago
- Boston Globe
US trade partners around the world react to Trump's new tariffs
Here's the latest: Thailand says 19% rate reflects 'close partnership' with US Thailand's finance minister says the 19% tariff rate imposed by the US 'reflects the strong friendship and close partnership' between the two countries. Advertisement Thailand's new rate of 19% was reduced from 36%, similar to other rates imposed on Southeast Asian nations, such as Vietnam, Cambodia and the Philippines. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up Finance Minister Pichai Chunhavajira wrote in a social media post on Friday that it would 'maintain Thailand's competitiveness on the global stage' and opens the 'door to economic growth,' but also acknowledged it would pose problems for some sectors of the economy and said that 'comprehensive support measures have been prepared.' Speaking to reporters at a news conference in Bangkok later Friday, Pichai said that the deal will still need more time to be hammered out in details. Pakistan welcomes 19% tariffs under US trade deal Pakistan on Friday welcomed a new tariff arrangement with the United States that sets a 19% duty on Pakistani exports, calling it a positive step that could boost trade and economic growth. Advertisement The new rate is lower than the 29% tariff initially announced by US President Trump and below the 25% currently imposed on neighboring India. The Finance Ministry said the agreement reflects a 'balanced and forward-looking approach' by US authorities and will help keep Pakistani goods competitive in the American market compared to other South and Southeast Asian countries. The ministry said the revised tariff is expected to benefit key export sectors, particularly textiles, which remain the backbone of Pakistan's export economy. The ministry said that Pakistan will continue to engage closely with Trump and the US administration to promote the shared goals of economic development and mutual prosperity. Norway wants 'zero tariffs' Norwegian Prime Minister Jonas Gahr Støre told newspaper VG that he believes the Scandinavian country should have 'zero tariffs.' Gahr Støre, following the White House's announcement, said Norwegian officials are still in talks with Washington in the hopes of eliminating the duties altogether. Norway got hit with an expected 15% tariff. Switzerland hit with 39% tariff and will try to negotiate The land of luxury watches, pharmaceuticals and secretive financial services was reeling Friday, Switzerland's National Day, upon learning it had been slapped with a 39% tariff, although US President Trump had proposed a 31% rate in April. The Swiss government said officials will continue to seek a negotiated solution. 'The Federal Council notes with great regret that, despite the progress made in bilateral talks and Switzerland's very constructive stance from the outset, the US intends to impose unilateral additional tariffs on imports from Switzerland,' the government said in a post on X. Trump orders 35% tariff on Canadian goods US President Trump has raised the tariff rate on US imports from Canada to 35% from 25%, effective Friday, citing a lack of cooperation on illicit drugs. Advertisement The announcement from the White House late Thursday said that Canada had failed 'to do more to arrest, seize, detain, or otherwise intercept drug trafficking organizations, other drug or human traffickers, criminals at large, and illicit drugs.' Trump earlier had threatened to impose the higher tariff on Canada if no deal was reached by Friday, his deadline for reaching trade agreements with dozens of countries. Canada wasn't included in Trump's updated list of tariff rates on other countries announced late Thursday. Those import duties are due to take effect on Aug. 7. Malaysia hails 'significant achievement' in 19% tariff rate Malaysia's Trade Ministry said Friday that the US tariff reduction from 25% to 19% was a 'significant achievement' as the deal was struck without compromising key national interests. 'The 19% rate roughly tracks the rate of other countries in the Southeast Asian region,' the ministry said in a statement. 'Most importantly, Malaysia had stood firm on various 'red line' items, and the 19% tariff rate was achieved without compromising the nation's sovereign right to implement key policies to support the nation's socio-economic stability and growth.' The ministry said that Malaysia's economy remains resilient despite global headwinds, citing strong domestic demand and ongoing structural reforms. The statement didn't give further details, but officials previously said that nontariff barriers such as halal certification, which affects US beef and poultry exports, along with digital trade and government procurement were sticking points. It's unclear what concessions Malaysia made. Cambodia will impose zero tariffs on all American goods Cambodia's deputy prime minister, who led trade talks with the US, thanked US President Trump for setting the tariff rate on Cambodian goods at 19% and said the government would impose zero tariffs on all American goods. When Washington originally posted its list of notional 'reciprocal' tariffs, the rate for goods from Cambodia was 49%, one of the highest in the world. It had estimated that Cambodian tariffs on US imports averaged 97%. Advertisement Deputy Prime Minister Sun Chanthol also said Cambodia would purchase 10 passenger aircraft from Boeing in a deal they hoped to sign later this month. Several other nations had already announced similar aircraft purchase deals as part of their trade packages. Trump had threatened to not conclude a deal with reduced tariffs if Cambodia and Thailand didn't stop a recent armed conflict over border territory. The two nations agreed on a ceasefire beginning Tuesday that appears to be holding. Cambodia publicly celebrated Trump's peace initiative, suggesting he deserved a Nobel Prize for his intervention. Sun Chanthol said Friday that Cambodia would nominate him for the honor. Australia says 10% rate gives country competitive advantage Australian Trade Minister Don Farrell says gaining the minimum 10% US tariff on exports including beef, lamb, wine and wheat gave Australia a competitive advantage over some competitors. Farrell told reporters Australia did not introduce tariffs on US goods at any point, and added, 'I haven't seen any case or any example where the retaliatory imposition of tariffs has resulted in a country being in a better position.' Farrell argues that no US tariffs can be justified because Australia imposes no tariffs on its bilateral free trade partner. The United States has enjoyed a trade surplus with Australia for decades. Australian Prime Minister Anthony Albanese has been criticized for failing to secure a face-to-face meeting with US President Trump to discuss trade. Japan welcomes Trump's signing of executive order Japanese Chief Cabinet Secretary Yoshimasa Hayashi welcomed US President Trump's signing of the executive order setting Japan's new reciprocal tariffs as a step that would reduce uncertainty of the US trade policy and its negative impact on the global economy, including that of Japan. Advertisement Hayashi, however, said Japan still needs to closely examine the measures and continue urging prompt implementation by the US government to carry out the agreement, including reduction of tariffs on automobiles and auto parts. Hayashi acknowledged that Japan's new tariff rate of 15% is a 'major reduction' from the initially imposed 25%, but his government will continue to watch and mitigate its impact on Japanese exports, including by providing financial assistance for small and medium-sized businesses. New Zealand looks to lobby for lower tariff rates New Zealand officials said they would lobby the administration for a change to the 15% tariff announced for the country's exporters to the US. It's an increase from the original 10% baseline announced for New Zealand in April. 'We don't think this is a good thing. We don't think it's warranted,' Trade Minister Todd McClay told Radio New Zealand Friday. He said New Zealand appeared to have been targeted for a larger levy because the country sells more to the US than it imports, but that the gap of about half a billion dollars each year was 'not significant or meaningful.' Neighboring Australia dodged an increase to remain at 10%, but it buys more from the US than it exports, McClay added. The United States in January overtook Australia to become New Zealand's second-largest export partner, behind China. New Zealand exports are largely made up of meat, dairy, wine and agricultural machinery. Taiwan president says final tariff negotiations yet to come Taiwan President Lai Ching-te said Taiwan had yet to engage in final negotiations with the US owing to scheduling difficulties and that he was hopeful the final tariff rate would be reduced even further after a final round of talks. Advertisement The Trump administration hit Taiwan with 32% tariffs, and lowered it to 20% on Thursday. Taiwan was notified on Thursday by the administration of the lower rate. 'Twenty percent from the beginning has not been our goal. We hope that in further negotiations we will get a more beneficial and more reasonable tax rate,' he told reporters in Taipei on Friday. Lai also linked trade talks to security issues, as the US is Taiwan's largest ally even though it does not formally recognize the island. 'We want to strengthen U.S. Taiwan cooperation in national security, tech, and multiple areas,' he said Friday. The US is Taiwan's most important export market and strategic ally, Lai said in an earlier statement Friday morning. Cambodia prime minister thanks Trump for dropping tariff rate Cambodian Prime Minister Hun Manet expressed his thanks to US President Trump for the dropping of tariffs from 36% to 19% and he called the reduction 'good news' for Cambodia. Posted on his social media platform, Hun Manet said Trump hadn't only helped broker a ceasefire between Cambodia and Thailand forces after nearly a weeklong clash, but also assisted Cambodia's economy by lowering tariffs. 'This is good news for the people and economy of Cambodia to continue developing the country,' Hun Manet said. Thailand successfully negotiates lower tariff rates Thailand's government spokesperson Jirayu Houngsub said Thailand says the US agreed to reduce the tariffs rate from 36% to 19%, a rate similar to those imposed on many other Southeast Asian countries such as Vietnam and the Philippines. 'It's one of the major successes of Team Thailand in a win-win approach, to secure the country's export base and economic security in a long run,' he said in a statement. He didn't immediately say what was the latest offer Thailand made to the US. The agreement came days after a ceasefire between Thailand and Cambodia to halt the nearly weeklong clashes that killed at least 41 people. It was brokered with US pressure as President Trump said he wouldn't move forward with trade agreements if the conflict continued.
