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Bangkok Post
2 days ago
- Business
- Bangkok Post
Recalibrating Thai-US ties (once again)
It is about time for Thailand to discard the two-century-old euphemism about enduring Thai-US ties and be brutally realistic. It is about time for a blunt question -- what can Thailand offer to reduce its soaring trade surplus of US$43 billion with the US? If Thai negotiators don't come up with any interesting offers, then the tariff for exported goods from Thailand to the US will be 36% across the board after Aug 1. Currently, negotiations between Washington and the government are progressing. The outcome, expected next month, will have far-reaching impacts beyond trade and the economy. The deal will directly affect the stability of this weak government. From a broader perspective, the tariff figure will serve as a barometer of future Thai-US relations in this era of geopolitical turbulence. It is worth noting that Deputy Prime Minister and Finance Minister Pichai Chunhavajira has instructed related ministries to prepare the Thai agricultural and industrial sectors for the impact of US tariffs, but he has yet to explain why and how. Mr Pichai was quoted as saying that local industry has to upgrade and realign itself with global trends and become more competitive. Mr Pichai revealed that the US plans to require a local content requirement in products sold in the US of as much as 80% to prevent transhipped goods from entering its market under false rules of origin. He reiterated that Thailand must proactively negotiate to protect mutual and sustainable interests, while urgently addressing three key issues. First, Thailand must present concrete and enforceable measures to reduce the trade surplus. Secondly, the country needs to provide broader market access to US goods. Third, Thailand needs to remove non-tariff barriers (NTBs). Among Asean members, Thailand has the toughest sanitary and phytosanitary (SPS) measures and other regulatory frameworks intended to protect consumers, agriculture and the environment. Under the Trump administration, the US is pursuing a unilateral approach under what it calls "US preferential treatment". If countries refuse the terms, they may face steep tariffs and other retaliatory measures. Mr Pichai also admitted that a non-disclosure agreement (NDA) is already in place, limiting the release of some information pertaining to the deals. Amid the secrecy, the finance minister assured the public that negotiations are guided by long-term shared benefits and regional balance. He did not elaborate how. President Donald Trump's reciprocal tariffs are indeed perceived as a plan to rein in the ripple effect of the China Plus One supply chain model. China Plus One is a supply chain diversification strategy that emerged in 2014 and 2015 due to the escalating cost of labour in China, leading multinational companies to seek alternative manufacturing and sourcing options in other Asian countries. Throughout the Biden administration, the so-called China plus one formula has been beneficial to key Asean members such as Vietnam, Malaysia, Thailand and Indonesia, where investors opened their factories after pulling out from China. With Mr Trump's team in charge, Mr Pichai admitted that transhipment, where products are rerouted through third countries to evade tariffs, is the most difficult as it is closely linked to local content rules. Previously, the transhipment threshold was only 40 per cent, but this could rise to 60-80%, forcing countries to redefine what counts as actually Made-in-Thailand materials. According to Mr Pichai, countries with low levels of local manufacturing, such as those with production bases just starting up, will be hardest hit regardless of the tariff rate. For instance, Vietnam, which has low local content, is facing high transhipment tariffs. In the case of Thailand, the country could also suffer due to the downturn in authentic local manufacturers and the influx of investment and transhipments from China. In short, despite Thailand's export volume surging, the share of local manufacturing production in exports remains unchanged. The real challenge for Thai industry is to boost its local capacity and improve the level of local content. If not, Thai exporters will face higher tariffs on transhipped goods. Mr Pichai admitted that the US wants Thailand to open its market and remove NTBs on agricultural products and meat, especially pork and offal. One new feature in the negotiations is in the energy sector. Thailand has offered to purchase natural gas and shale oil from the US, which have a lower price than on the global market. In this respect, Thailand is also considering more energy-related investments in the US. Mr Pichai defended Thailand's offer of zero tariffs for certain US products, as other countries, including China, have already been given the same privileges under existing FTAs. Many Thai exports under existing FTAs are not competitive or undersupplied domestically. "This offer is not being made to just any country-- it is unique to the US," he said, adding the deal could empower farmers and boost Thailand's competitiveness, serving as a platform for national reform. Once the tariff debacle has been concluded, it should be Thailand's turn to renegotiate its strategic relationship with the US. In the post-Cold War era, the US has benefited tremendously from Thailand's strategic values and locations. As an ally, Thailand has hosted the Cobra Gold military exercises nonstop for 44 consecutive years. It remains one of the largest multinational training operations in the world, especially for the American armed forces. More than the US Indo-Pacific Command would like to admit, this annual exercise provides the opportunity for the US to simulate "command and control" operations involving over 30 participating nations. It also promotes interoperability of foreign troops, whose countries procured American weapons. On paper, Cobra Gold positions Thailand as a central node in regional security. But in reality, Thailand has only benefited marginally. It is time to push for a new arrangement that aligns with the country's security needs. At the very least, there should be more Thai-led planning and command roles. Thailand has been a non-Nato treaty ally since 2003, without consequential benefits. The country does not enjoy defence guarantees, robust arms transfers or significant technology sharing. The US side often complains that Thailand is too close to China, which it has denied. Deep down, Washington does not trust Bangkok's alliance. Some glaring evidence is the Royal Thai Air Force's need to purchase Swedish Gripen jets, after the US refused to sell F-35 jet fighters, citing concerns about Thailand's ability to handle such advanced aircraft and its relationship with China. President Trump's new term is a different game. In engaging with Mr Trump, Thailand must be more assertive in demanding greater technological sharing, joint capability building, and access to US strategic platforms. For instance, Thailand should have been a recipient of US space technology and cyber surveillance, which are not forthcoming. The US halted its international military education and training program for Thailand a decade ago. The programme used to be a primer for the person-to-person network among the Thai-US top brass. Now, this bilateral link is waning. In future Thai-US strategic meetings, Thailand must not be shy or submissive. The US has been pressing the rest of the world for its own economic stability at the peril of allies and friends, and Thailand has a track record of yielding to US demands on defence and even made economic concessions. Now it is time for a new red line and a new game for Thailand to redefine its security cooperation with the US, aligning the ties with Thailand's strategic autonomy. Perhaps, the next question is what the Trump administration wants from security engagement with Thailand.
The Hindu
4 days ago
- Business
- The Hindu
Telangana mulls policy for GCCs to attract more firms, make process easier
A policy for global capability centres (GCCs) that will seek to consolidate on Hyderabad's emergence as a GCC hub, make the process for investors setting up such facilities easier and attract more companies is on the anvil in Telangana. 'Going forward, the Telangana government is planning to introduce a custom GCC policy,' the Chief Minister's office said, announcing that in the first six months of 2025 Hyderabad attracted as many as 27 GCCs. The city continues to attract mid-market companies as a category and US-based, European, Japanese and South Korean companies. McDonalds, Vanguard, Citizens Bank, Heineken, BarryCalebaut, DAZN and Dai-ichi are some of the firms that have established GCC this year in Hyderabad. The CMO spoke of the potential to attract more GCCs with the proposed policy while also highlighting how the State government's emphasis on the China Plus One strategy of global firms is helping attract new players across industries. The China Plus One strategy essentially pertains to a geographical diversification global firms with manufacturing operations in China have set out on and for which they are evaluating India and a few other countries in Asia to locate the new facilities. Chief Minister A. Revanth Reddy had been pointing out in his addresses at industries events on how the favourable, stable government policies, strong ecosystem and a legacy of development have contributed to Hyderabad's emergence as a preferred destination of companies. Hyderabad is not competing with other States but other countries, he had declared during the opening of new facilities of many companies in recent times. Preferred by GCCs Hyderabad has become a preferred destination for MNCs expanding their GCC operations. The city is home to more than 355 GCCs, a majority of them of US-based firms. As many as 70 new GCCs were setup in 2024 and Telangana continues to welcome more in 2025, across multiple areas, including risk management, cybersecurity, machine learning, supply chain management, cloud computing and AI/ML Research, the CMO said. Telangana has been figuring consistently among top 3 States in Ease of Doing Business rankings in India. Some of the contributing factors for Hyderabad includes its infrastructure, skilled labour, low cost of living and favourable policies that have helped attract technology, manufacturing, financial services and pharmaceutical firms. The proposed Regional Ring Road (RRR), planned to encompass the existing Outer Ring Road (ORR), is set to expand the investment horizons of Hyderabad with greater connectivity to the international airport. The CMO said during the visit of Chief Minister Revanth Reddy to the World Economic Forum (WEF) earlier this year, the Telangana delegation met with more than 40 global corporate leaders, attracting projects entailing ₹1.78 lakh crore . More sectoral policies Approvals for new industrial projects are issued through a single-window clearance system, based on self-certification, in less than 15 days. In addition to the GCC policy, the State government will soon launch sectoral policies on electric vehicles, Life Sciences, AVGC and Semiconductors, the CMO said. IT industry body Nasscom in a report last year said multiple factors are contributing to emergence of Telangana as a preferred GCC destination, including single window clearances for State registrations, licenses and approvals for new GCCs. Sustain focus In its recommendation, Nasscom said the State government should sustain infrastructure investment, focus on Deeptech and high-end skills development and target attracting more than 500 GCCs by 2030 by conducting global roadshows and project Telangana as Unicorn GCC Hub.
CNBC
7 days ago
- Business
- CNBC
Expect tariff 'cascade' effect across slowing global economy, top UN official warns
The leading arm of the United Nations focused on trade and development, UNCTAD, says President Trump's tariff policies are already creating new costs and disruptions in the global supply chain, and for less developed nations that trade with the U.S., the worst economic fallout hasn't hit yet. "We already see a disruption in the global supply chain," said Rebeca Grynspan, Secretary General of UNCTAD. "Many of the CEOs sit and wait, because if there is no predictability, and what you need for trade and investment is predictability and trust," she added. Earlier this year, UNCTAD released data showing global investment back at financial crisis era levels. The UN arm is also forecasting one-half a percentage point to be shaved off of global growth this year. "We are worried the high level of uncertainty is paralyzing business decisions, which is impacting trade, resulting in trade being revised downward," Grynspan said of the lowered global GDP forecast of 2.3%, down from 2.8%. "This is a lot," she said. "This is already much lower than the growth we experienced in the last decade," she added. U.S. consumer inflation increased in June, a spike attributed to higher prices on consumer goods imported from foreign countries, though the Trump administration says tariffs do not cause inflation. Vietnam, Cambodia, and Malaysia, three Asian countries that benefited from the "China Plus One" supply chain strategy that saw more manufacturing move to these countries, are seeing an impact as supply chains shift again, Grynspan said. Trump has threatened to add a 40% tariff onto any good that uses what is known as transshipment, with a product's journey starting in China but then moving to nations such as Vietnam to avoid Chinese tariffs. The layering of tariffs will cause the most economic pain for the least developed nations globally, according to the UN official, with a combination of existing tariffs and Trump tariff threats resulting in a stacking up of trade taxes that could lead to a reduction in exports of over 50%. "This is a cascade," she said. "It will affect jobs, and it will affect the stability in many countries, where even growth will be lower than the average in the world," Grynspan said. "If you take the least developed countries of the world, 46 countries that are the most vulnerable, we project that their exports could be impacted, as much as 54% down, if the tariffs are put on them," she added. Cambodia's exports to the U.S. represent more than 10% of its GDP, according to the Center for Global Development. Tariffs imposed by the Trump administration could erase over $4.5 billion in Cambodian exports over the next four years, with garments and travel goods suffering the largest blows, according to research firm Datawheel, with increasing risk to Cambodia's economic and social stability. Grynspan said while it is a good sign that the Trump administration wants to negotiate trade agreements, these deals are complex and take time to complete, and the current uncertainty is impacting economic growth and investment. At the same time, another inflationary challenge for the global supply chain has picked up again, with increasing aggression of Houthis towards freight vessels in the Red Sea. Two vessels were attacked in recent weeks, resulting in the sinking of one containership. "These choke points are very important (to trade)," Grynspan said. "When they are disrupted, the whole system suffers." She said the latest attack in the Red Sea raised the war premium in marine insurance by 1% above the value of the ship, or as much as $1 million. Added fuel costs as a result of ocean carriers traversing longer routes to avoid the Red Sea adds to inflationary pressures. She said the Red Sea situation alone could add 0.6% to global prices.
Time of India
16-07-2025
- Business
- Time of India
Telangana committed to growth, political changes won't matter, says CM Revanth Reddy
HYDERABAD: Chief minister A Revanth Reddy on Tuesday said that Telangana remains committed to industrial growth, regardless of political transitions, and is now working to introduce globally competitive, futuristic policies to attract investments across sectors. The Congress govt, he said, is focused on transforming Telangana into a $3 trillion economy by 2047. Speaking after laying the foundation stone for ICHOR Biologics 2.0 expansion unit at Genome Valley, the CM said continuity and consistency in industrial policy boost investor confidence. "When policies do not change arbitrarily and become more investor-friendly while retaining the required regulatory oversight, it strengthens trust," he said. You Can Also Check: Hyderabad AQI | Weather in Hyderabad | Bank Holidays in Hyderabad | Public Holidays in Hyderabad Genome Valley, he said, is a matter of national pride. It accounts for 33% of India's vaccine production and over 40% of bulk drug output, he said. "Hyderabad has become the vaccine and bulk drug capital of the country. During the Covid-19 pandemic, Genome Valley played a key role in exporting vaccines across the globe," he noted, while thanking the entrepreneurs behind its success. Govt attracted ₹3.2L crore in 18 months, says Revanth ICHOR Biologics managing director Sudini Anand Reddy said the 1.75 lakh sq ft expansion will support the development of 11 new proteins over the next two years, making ICHOR a frontrunner in plasma-derived therapeutics. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 15 Most Gorgeous Women, Ranked BigGlobalTravel Undo Revanth also said that Telangana attracted Rs 3.28 lakh crore in investments in the past 18 months and is positioning Hyderabad as the next big 'China Plus One' destination for global manufacturing. "Taiwan is currently playing that role, but there is now a spillover. Telangana is ready with policy, infrastructure and sectoral support to capture this opportunity," he said, urging Genome Valley to help attract more investments in pharma, electric vehicles, IT, and emerging sectors. IT and industries minister D Sridhar Babu said Telangana's life sciences sector is recording a compound annual growth rate (CAGR) of 23%, compared to the national average of 14%, and contributes nearly 3% to the state's GSDP, double the national average. He highlighted Hyderabad's emergence as a global life sciences cluster, alongside Boston, San Francisco, Cambridge and Tokyo. In 2024 alone, life sciences firms leased 2.4 million sq ft of office space in the city - up from 1.8 million sq ft in 2023. To accelerate this momentum, Telangana plans to set up dedicated pharma villages along the Hyderabad-Nagpur and Hyderabad-Bengaluru corridors, he said. The state is also focusing on cell and gene therapy, AI-powered diagnostics, drug innovation, rare disease research, and green chemistry - aiming to become a global model for life sciences innovation, he added.
New Indian Express
16-07-2025
- Business
- New Indian Express
Telangana attracted Rs 3.28L crore investments in 18 months: CM Revanth Reddy
HYDERABAD: Chief Minister A Revanth Reddy on Tuesday said that the state government intends to adopt a 'China Plus One' strategy to attract more investments to Telangana and Hyderabad. He said: 'We want to create a 'China Plus One' destination. After the Covid pandemic, the entire world is searching for 'China Plus One' countries. They want to shift their investments and manufacture their products at other places. Now Taiwan is the place, but it will be only after us. Everyone is focusing on China Plus One. Most of the investors are looking towards India, but my point is to create an alternative China Plus One in Hyderabad and Telangana.' Addressing the gathering after laying the foundation stone for a new facility of ICHOR Biologics in Genome Valley in Hyderabad, the chief minister said that the government aimed to reach a $1 trillion economy by 2035 and a $3 trillion economy by 2047. 'Telangana Rising - 2047 will be unveiled on December 9, 2025. Our target is to reach a $3 trillion economy by 2047. The Centre targeted a $30 trillion economy by 2047. We want to contribute 10 per cent to the Indian economy,' he said. Stating that 33 per cent of the vaccines and 40 per cent of bulk drugs in India are being produced in Genome Valley here, Revanth said that during the Covid-19 pandemic, Hyderabad had provided vaccines to about 100 countries. He said that though the parties and governments have changed, the policies have been continuing since 1994. After the Congress came to power, we did not change the policies, incentives and permissions for the industries in the state. He said that the government has attracted `3.28 lakh crore investments in the last 18 months. 'Hyderabad is a place for data centres and tops in GCCs. Telangana is far better in attracting biopharma and other industries in the country compared to any other state. We want to compete with the world, not with states like Maharashtra, Andhra Pradesh, Karnataka and others,' the chief minister said. IT & Industries Minister D Sridhar Babu, Labour Minister G Vivek Venkatswamy, ICHOR Biologics Managing Director Sudini Anand Reddy and others were present at the ceremony.
