Latest news with #Paopoom
Bangkok Post
3 days ago
- Business
- Bangkok Post
Thais will not slash all tariffs on US goods
Thailand will not agree to reduce tariffs to zero on all US goods in ongoing trade talks, as such a move could significantly impact domestic producers and strategic industries, Deputy Finance Minister Paopoom Rojanasakul said. Speaking ahead of a scheduled meeting between the "Team Thailand" delegation led by Finance Minister Pichai Chunhavajira and the Office of the United States Trade Representative (USTR) on Thursday, Mr Paopoom emphasised the need to strike a balance between protecting exporters and safeguarding local producers, including farmers and small businesses. "The winner in negotiations is not the one who gets the lowest tariff, but the one who can maintain the most balanced outcome," said Mr Paopoom. He revealed that current reciprocal tariff rates on Thai exports to the US average around 36%, and discussions are ongoing to secure more favourable terms. However, he warned that any concessions made to reduce US tariffs would inevitably come with expectations for increased market access in return -- something that could pose risks to Thailand's local industries. "It's not just about securing a lower tariff rate," he said. "We must consider the impact on domestic sectors. Nothing comes without a cost. If we want the US to lower tariffs, we must offer access to our markets in exchange." Mr Paopoom stressed that Thailand could not adopt a blanket zero-tariff approach similar to Vietnam's, as this would require full market access for US goods. "We must weigh the benefits against the potential harm. He noted that while the export sector plays a significant role in the country's GDP, the government must also consider the well-being of farmers, SMEs, and domestic livestock producers. "Thailand is not made up of exporters alone. We have to look after all segments of society." The deputy finance minister clarified that strategic products -- those critical to national interests -- would need to be excluded from zero-tariff commitments. Overexposing local markets to foreign goods could disrupt domestic supply chains and damage the competitiveness of Thai producers. In addressing comparisons with Vietnam, Mr Paopoom explained that Vietnam receives two distinct tariff rates under US trade policy: 20% for goods made with domestic or regional inputs that meet Regional Value Content (RVC) requirements, and 40% for those that do not. Given that Vietnam's supply chain is less developed than Thailand's, he noted that a larger proportion of Vietnamese exports are likely subject to the higher 40% tariff. Commerce Minister Jatuporn Buruspat has confirmed that Thailand has offered to reduce import tariffs on tens of thousands of products from the US to zero. Additional proposals have also been submitted. As trade talks continue, the Commerce Minister has instructed relevant agencies to draft contingency plans to mitigate the potential impact of any retaliatory tariffs that may be imposed by the US. Mr Jatuporn said the government is preparing for two scenarios -- one in which Thai goods are subject to a 36% tariff rate and another in which they receive a 20% tariff rate, equivalent to that offered to Vietnam, a regional competitor. Chanintr Chalisarapong, vice chairman of the Thai Chamber of Commerce, told Bloomberg News that Thailand plans to scrap tariffs on 90% of US goods, up from the previous 60%. The proposal, covering 10,000 US products, will be presented to Washington and could reduce Thailand's $46 billion trade surplus by 70% within three years. Final tariffs are expected to fall to 18–20%, he said, adding the plan is more ambitious than previous offers and exceeds commitments by Indonesia and Vietnam, reflecting Thailand's capacity to process and re-export US goods.
Bangkok Post
3 days ago
- Business
- Bangkok Post
Thais will not slash all tariffs
Thailand will not agree to reduce tariffs to zero on all US goods in ongoing trade talks, as such a move could significantly impact domestic producers and strategic industries, Deputy Finance Minister Paopoom Rojanasakul said. Speaking ahead of a scheduled meeting between the "Team Thailand" delegation led by Finance Minister Pichai Chunhavajira and the Office of the United States Trade Representative (USTR) on Thursday, Mr Paopoom emphasised the need to strike a balance between protecting exporters and safeguarding local producers, including farmers and small businesses. "The winner in negotiations is not the one who gets the lowest tariff, but the one who can maintain the most balanced outcome," said Mr Paopoom. He revealed that current reciprocal tariff rates on Thai exports to the US average around 36%, and discussions are ongoing to secure more favourable terms. However, he warned that any concessions made to reduce US tariffs would inevitably come with expectations for increased market access in return -- something that could pose risks to Thailand's local industries. "It's not just about securing a lower tariff rate," he said. "We must consider the impact on domestic sectors. Nothing comes without a cost. If we want the US to lower tariffs, we must offer access to our markets in exchange." Mr Paopoom stressed that Thailand could not adopt a blanket zero-tariff approach similar to Vietnam's, as this would require full market access for US goods. "We must weigh the benefits against the potential harm. He noted that while the export sector plays a significant role in the country's GDP, the government must also consider the well-being of farmers, SMEs, and domestic livestock producers. "Thailand is not made up of exporters alone. We have to look after all segments of society." The deputy finance minister clarified that strategic products -- those critical to national interests -- would need to be excluded from zero-tariff commitments. Overexposing local markets to foreign goods could disrupt domestic supply chains and damage the competitiveness of Thai producers. In addressing comparisons with Vietnam, Mr Paopoom explained that Vietnam receives two distinct tariff rates under US trade policy: 20% for goods made with domestic or regional inputs that meet Regional Value Content (RVC) requirements, and 40% for those that do not. Given that Vietnam's supply chain is less developed than Thailand's, he noted that a larger proportion of Vietnamese exports are likely subject to the higher 40% tariff. Commerce Minister Jatuporn Buruspat has confirmed that Thailand has offered to reduce import tariffs on tens of thousands of products from the US to zero. Additional proposals have also been submitted. As trade talks continue, the Commerce Minister has instructed relevant agencies to draft contingency plans to mitigate the potential impact of any retaliatory tariffs that may be imposed by the US. Mr Jatuporn said the government is preparing for two scenarios -- one in which Thai goods are subject to a 36% tariff rate and another in which they receive a 20% tariff rate, equivalent to that offered to Vietnam, a regional competitor. Chanintr Chalisarapong, vice chairman of the Thai Chamber of Commerce, told Bloomberg News that Thailand plans to scrap tariffs on 90% of US goods, up from the previous 60%. The proposal, covering 10,000 US products, will be presented to Washington and could reduce Thailand's $46 billion trade surplus by 70% within three years. Final tariffs are expected to fall to 18–20%, he said, adding the plan is more ambitious than previous offers and exceeds commitments by Indonesia and Vietnam, reflecting Thailand's capacity to process and re-export US goods.
Bangkok Post
5 days ago
- Business
- Bangkok Post
Cabinet preps Financial Hub Bill draft
The cabinet is preparing to propose the draft Financial Hub Bill for parliamentary deliberation in the near future. According to Deputy Finance Minister Paopoom Rojanasakul, the Council of State has already completed its review of the draft law. The next step will be to present it to parliament for consideration in its first reading. "This draft law will establish an ecosystem that aligns with the needs of global financial companies," said Mr Paopoom. The proposed Financial Hub Act aims to elevate Thailand into a regional financial centre by overhauling the licensing and regulatory framework under the Financial Hub initiative, making it comprehensive and business-friendly. The draft law is designed to attract investment by streamlining operations and establishing a central agency to set policies that promote Thailand as a financial hub. It also lays out strategies to develop the financial industry ecosystem, including workforce development and infrastructure improvements to meet the demands of leading global financial firms. The draft law will define target businesses within the Financial Hub and establish the Office of the Regulatory and Promotion Committee for the Financial Business Hub as a One-Stop Authority (OSA). It will define qualifications for business operators, licensing procedures, investor incentives and regulatory frameworks that are efficient and aligned with international standards. The draft law approved by the cabinet contains nine chapters and 94 sections, including General Provisions, which specifies the effective date of the Financial Hub Act and relevant definitions. Chapter 1 – Regulatory and Promotion Committee for the Financial Business Hub, which outlines the structure and authority of the committee responsible for comprehensive oversight of the Financial Hub, including setting business guidelines, issuing licences, inspecting operations and revoking licences. Chapter 2 – Office of the Committee, which establishes the OSA to provide one-stop services and facilitate businesses in licensing and receiving incentives. Chapter 3 – The director, who specifies qualifications and the appointment process for the executive managing the Office. Chapter 4 – Licensing of Target Businesses, defining types and scopes of businesses eligible for licences, and the characteristics of legal entities seeking to operate within the Financial Hub. Chapter 5 – Promotion of Incentives, outlining the benefits and incentives available to businesses established under the Financial Hub framework. Chapter 6 – Supervision of Businesses under Promotion, establishing regulatory standards for businesses within the Financial Hub, covering financial institutions, securities firms and insurance businesses, aligned with current regulatory practices. Chapter 7 – Officials, granting officials the authority to inspect the operations of businesses within the hub. Chapters 8 and 9 – Administrative Sanctions and Criminal Penalties, setting forth penalties for non-compliance with the Act's rules and conditions.
Bangkok Post
11-07-2025
- Business
- Bangkok Post
Bill aims to enhance credit guarantees
The draft National Credit Guarantee Agency (NaCGA) Bill mandates that all financial institutions contribute to a credit guarantee fund in exchange for a guarantee system that reduces their lending risk. According to Deputy Finance Minister Paopoom Rojanasakul, every financial institution providing credit to companies or businesses will be required to contribute to the credit guarantee fund established under this law. He said the fund will be sourced from three channels: government contributions, contributions from financial institutions, and fees collected from entrepreneurs requesting credit guarantees. Mr Paopoom said the government does not intend to set high contribution rates. The purpose of the fund is to build a higher-quality credit guarantee system, which should reduce the risk borne by financial institutions. Though the contributions made by institutions will account for only one-third of the fund, they should benefit significantly from reduced lending risks, he said. The exact contribution rate from financial institutions has yet to be finalised, but it is expected to be set at a very low level, said Mr Paopoom. The ministry held discussions with financial institutions regarding their contributions to the fund prior to the drafting of the law to gather feedback on the pros and cons. As with any legislation, there are winners and losers, but the key is to assess the overall national benefit, he said. This system represents a vital enhancement of the country's financial capacity, said Mr Paopoom. The draft aims to reform the current credit guarantee system operated by the Thai Credit Guarantee Corporation (TCG), making it easier for entrepreneurs to access loans. A survey revealed that 40% of the country's 3.2 million small and medium-sized enterprises (SMEs) still face difficulty in accessing credit through formal financial systems. The draft stipulates financial institutions must contribute to the NaCGA fund, which will serve as a source of funding for credit guarantee operations. The government's contribution is estimated at 10 billion baht, while entrepreneurs also pay guarantee fees. The draft requires financial institutions to contribute to the fund at a rate not exceeding 0.3% of the total outstanding business loans of commercial banks and specialised financial institutions. The effective rate will be issued later via a ministerial regulation, said Mr Paopoom. The credit guarantee fee charged by NaCGA is based on the individual risk profile of each entrepreneur, unlike the current portfolio-based fee system that does not reflect the specific risk of individual loans. Under the new model, the agency assesses the credit risk of each loan application requesting a guarantee. Once approved, the entrepreneur can use the guarantee certificate to apply for a loan from a financial institution. The scope of NaCGA will be broader than that of TCG, he said, able to guarantee loans from commercial banks and non-bank financial institutions, as well as guarantees for debt instruments or asset securitisation. However, this does not include equity instruments or loans provided by other businesses involved in capital sourcing, as determined by the policy committee, and excludes equity or equity-like instruments. NaCGA may also guarantee loans provided by other funding-related businesses, as determined by policy directives, excluding equity or quasi-equity instruments. This broader mandate is designed to better address the liquidity needs of entrepreneurs. Entrepreneurs eligible for guarantees from NaCGA are not limited to SMEs, as other types and sizes of businesses may also qualify, as defined later by the board of directors. The agency can also propose plans directly to the cabinet in urgent cases where there is a need to support entrepreneurs or promote credit access in alignment with government policy goals, such as the development of strategic sectors or the national economy. Beyond improving SMEs' access to formal credit and reducing reliance on informal funding sources, NaCGA is expected to serve as a stabilising mechanism in times of economic volatility, particularly during crises marked by a high level of risk and uncertainty in the financial system, said Mr Paopoom.
Bangkok Post
10-07-2025
- Business
- Bangkok Post
Paopoom looks for more assistance from monetary policy
Thai monetary policy must "step on the gas" to help support the economy, which has been affected by US reciprocal tariff threats, says Deputy Finance Minister Paopoom Rojanasakul. He said monetary policy is not only about policy interest rates, but also includes measures such as credit distribution, injecting liquidity into the economic system or easing certain conditions to incentivise banks to lend. In the past, the Finance Ministry called for the relaxation of loan-to-value criteria, and eventually the Bank of Thailand did ease these conditions, although it took a long time for consideration. Regarding the responsible lending framework, Mr Paopoom said it may need to be reviewed for deployment during a more suitable period. He said a key fiscal measure is the 115-billion-baht stimulus package already approved by the government, which is expected to rev up the economy in the fourth quarter of this year and the first quarter of 2026. On June 24, the cabinet approved 481 projects worth 115 billion baht as part of a stimulus package expected to create 7.4 million jobs and lift GDP growth by 0.4 percentage points. Finance Minister Pichai Chunhavajira said earlier the government needs to implement stimulus measures as both domestic and international factors weigh on the economy, especially the global trade war and US tariffs, which dampen exports and reduce income. The key principles for the stimulus budget include: ensuring widespread distribution of funds, promoting employment and supporting projects with long-term impacts. Each investment project must have a minimum value of 500,000 baht, except for essential projects such as those in the tourism sector, which may be below that threshold. The investment period must not exceed 12 months and must be completed by Sept 30, 2026. According to Mr Paopoom, Thailand's economic outlook would be improved if not for the new US tariff proclamation of 36% for Thailand on Tuesday, as the local Manufacturing Production Index posted growth for two consecutive months after previously falling into negative territory. "The Trump tariffs are a major issue, but the final tax rate for Thailand remains uncertain," he said. In the latter half of this year, Mr Paopoom said both the Thai and global economies are expected to face increasing challenges, with the Thai economy forecast to decline in the second half compared with the first half. The Bank of Thailand forecasts economic growth of 2.3% for 2025, with a 2.9% expansion in the first half and a 1.6% increase in the second half.
