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Bangkok Post
10-07-2025
- Business
- Bangkok Post
Tariffs part of power struggle
Thailand is caught in a power struggle between global superpowers, with each wanting the nation to take sides by using tariff measures as leverage, says a government official. According to a senior source at the Finance Ministry who requested anonymity, Washington is pressing Thailand to eliminate tariffs on US goods, matching the rate applied to Chinese imports under the Asean-China free trade agreement. "The US's demand for Thailand to reduce import tariffs to 0%, including on agricultural products and meat such as pork, could be seen as having a negative impact on domestic producers. On the other hand, US products are more expensive than Thai products, so it will ultimately be up to consumers to decide," said the source. Finance Minister Pichai Chunhavajira convened a meeting with the Joint Standing Committee on Commerce, Industry and Banking on Wednesday to discuss measures to mitigate the impact of potential US tariffs. Speaking after the meeting, Mr Pichai said the government is preparing measures to cushion the impact on each product group from US President Donald Trump's tariffs. "We must prepare solutions for the possible outcomes, whether they are favourable or moderately favourable. We need to assess who will be affected," he said, adding the negotiation process is continuing ahead of the Aug 1 deadline. Mr Pichai said previously the government broadly assessed how the US tariffs would impact exporters. However, this time the assessment is more detailed as the tariffs vary depending on the product type and its local content. The private sector plans to gradually submit impact data for Mr Pichai's review by Friday. Poj Aramwattananont, chairman of the Thai Chamber of Commerce, said the impact of the Trump tariffs on each product exported to the US varies, depending on the level of local content in each item. The proportion of local content the US will require is still unclear, he said. Mr Poj also expressed concern that tariff negotiations with the US may not be resolved soon, which could result in the US maintaining its proposed 36% tariff on Thai goods, which many analysts in Thailand consider excessively high. "We hope the US will impose a lower tariff rate on Thai products than on Vietnamese products, as Thailand's trade surplus with the US is much smaller," he said. Vietnam has a trade surplus with the US of US$120 billion a year, while Thailand's surplus is only $40 billion. According to the Finance Ministry source, Mr Pichai will chair a meeting today with economic ministers and the prime minister's advisors to discuss measures to address the tariff impacts.
Bangkok Post
02-07-2025
- Business
- Bangkok Post
Firms call for calm amid political tumult
Three major private sector groups have expressed growing concern over political instability, urging the government to ramp up efforts to rebuild trust and confidence among the public and businesses. Speaking after a meeting of the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) on Wednesday, Payong Srivanich, chairman of the Thai Bankers' Association, said a key element in rebuilding trust and confidence is emphasising the rule of law. According to Mr Payong, the JSCCIB is preparing to hold discussions with the Bank of Thailand, the National Economic and Social Development Council (NESDC), the Finance Ministry and the Commerce Ministry to realign economic priorities given the limited available resources, with a focus on the next 6-12 months. "The objective of the meetings is to reprioritise in line with global transformations and the intense challenges we're facing," he said. Political uncertainty could impact government disbursements and the formulation of the 2026 budget, said Mr Payong. If budget disbursements are delayed, this will affect the national economy, he said. Poj Aramwattananont, chairman of the Thai Chamber of Commerce, said the private sector is worried about the government's stability. Political processes must be concluded as quickly as possible so the country can function normally again, he said. In addition, a special taskforce is needed to restore confidence both domestically and internationally, said Mr Poj. "We are in a vulnerable position, facing economic challenges stemming from both domestic and international issues. We urge the government to act swiftly to address these problems," he said. "We are not involved in politics. Whichever group forms the government is fine, but it needs to get to work on solving problems promptly and listening to the views of the private sector." The JSCCIB expects Thailand's economy to grow by 1.5-2.0% this year, unchanged from a previous forecast, with exports shrinking by 0.5-0.3% and headline inflation ranging between 0.5-1.0%. However, if the US imposes a reciprocal tariff rate of 18% on Thai exports, this could lower Thai GDP growth to 1.5% this year, said Mr Payong. The JSCCIB is also concerned about the baht's appreciation to 32.5 per US dollar, which it views as stronger than other regional currencies. Meanwhile, he said Thailand needs more protective measures to support both the domestic manufacturing and service sectors in a balanced and standardised way, including addressing the subrogation of import rights of Thai-made products by third countries and improving the Board of Investment's (BoI) incentives. Companies receiving BoI investment privileges should be required to use designated levels of local content, employ domestic labour, and support Thailand's supply chain, said Mr Payong. The JSCCIB predicts Thai exports grew 15% year-on-year in the first half of 2025, though a contraction of 10% is anticipated in the second half, putting full-year export growth close to 0%. Kriengkrai Thiennukul, chairman of the Federation of Thai Industries, said in the first five months of this year, Thai exports expanded by 14.9%, with a gain of 18% in May. However, this level of export growth contrasts with the weak performance of Thailand's Manufacturing Production Index. He suggested the high export figures may be due to transshipments -- using Thailand as a pass-through hub for goods bound for third countries, notably to the US, which surged 27% for the period. Imports from China in the first five months also rose 29% year-on-year. Mr Kriengkrai recommended protective measures for domestic producers and a review of investment promotion policies. He also addressed the Thailand-Cambodia border trade dispute, noting total trade between the two countries totals 180 billion baht, with 170 billion coming from border trade. Border checkpoint closures have affected trade by about 500 million baht per day, with Thailand losing about 390 million baht in exports and Cambodia about 100 million baht in exports to Thailand.
Reuters
05-02-2025
- Business
- Reuters
Thai business group keep 2025 GDP forecast at 2.4% to 2.9%
BANGKOK, Feb 5 (Reuters) - Thailand's economy is still expected to grow between 2.4% to 2.9% this year despite intensifying global trade wars and increased competition from imported goods, a leading joint business group said on Wednesday. Domestic demand remains weak while the strengthening of the baht poses a challenge to exports, a key driver of Southeast Asia's second-largest economy, the Joint Standing Committee on Commerce, Industry and Banking said. The group said it was also maintaining its export growth forecast at 1.5% to 2.5% this year, even as U.S. tariffs on China raise concerns of more global trade disruption. Last year, exports increased 5.4% to a record $301 billion. Kriengkrai Theinnukul, chairman of the Federation of Thai Industries, said shipments had been boosted by stockpiling before President Donald Trump took office. "It may not be real demand. We will wait and see how this will affect exports in the first quarter," he told a news conference. Kriengkrai said Thai exports could become more competitive following U.S. tariffs on other countries. Trump has imposed tariffs on China and signalled the 27-nation European Union would be his next target, but he has suspended plans to level 25% tariffs on Mexico and Canada for 30 days. The influx of Chinese goods into Thailand remains a problem and as many as 30 industries will be affected this year if no proper measures are taken, Kriengkrai said. "China has clearly stated that it must produce and find markets. We have to protect ourselves," he said. For 2024, the group estimated economic growth at 2.8%. Official growth data is due to be released on Feb. 17.
