Latest news with #US-Vietnam
Bangkok Post
10-07-2025
- Business
- Bangkok Post
Economists predict at least 2 more BoT rate reductions
The Bank of Thailand is expected to cut the policy interest rate at least twice more this year as the economy could contract by 0.1-1.1% if a US tariff of 29-36% is slapped on Thai exports, say economists. Tharavit Prayochvibul, assistant vice-president at Bangkok Bank (BBL), said the economy is likely to grow less than 1% this year if the government cannot persuade Washington to lower its proposed tariff on Thai exports from 36%. "Investor confidence would be hit hard, prompting foreign direct investment to divert from Thailand towards other Southeast Asian countries, particularly Vietnam, which has a tariff of only 20%," said Mr Tharavit. A 36% tariff rate could cause Thailand's auto parts industry to lose its competitive advantage to Indonesian exports, while electronic parts face stiffer competition from goods shipped from Malaysia and the Philippines, noted BBL. Thai textile manufacturers would lose out to Vietnamese exporters, according to the bank. "It's time for the central bank to lend its support," he said. "We predict a high probability the regulator will cut the rate by up to three times later this year to shore up the economy." While global trade tensions are easing, abrupt policy shifts remain a risk factor. Thailand still faces domestic pressures including a weak tourism recovery, a fragile agricultural structure, political instability, high household debt, and subdued private investment, said Sutthichai Kumworachai, head of the research department at InnovestX Securities. "We expect the Bank of Thailand to lower interest rates twice to cushion the economy," he said. Piyasak Manason, head of economic research at InnovestX, said the global economy will continue to face risks from prolonged trade tensions in the third quarter. The US economy will likely decelerate due to tariff impacts as the Federal Reserve is not expected to cut rates and inflation could rise to 3.6%, he said. "For Thailand multiple risks remain, particularly the proposed US tariff that significantly threatens our GDP forecast for 2025 of 1.4%, which assumed a 15% tariff," said Mr Piyasak. In the worst-case scenario, which is US tariffs of 29-36%, Thai GDP could contract by 0.1% to 1.1%, with a 20% rate of probability, he said. Mr Piyasak said the US-Vietnam trade deal signed on July 2 could serve as a reference point for Thailand's trade negotiations, potentially requiring the elimination of Thai import tariffs on US goods, and significantly increasing imports from the US. If negotiations succeed and tariffs are lowered to 15-20%, Thai GDP could grow 1.1-1.4% this year, which has a 30% rate of probability, he said. If tariffs range from 21-28%, GDP growth may flatten to 0-1.0%, with a 50% rate of probability, according to the brokerage. Sitthichai Duangrattanachaya, head of investment strategy at InnovestX, said the brokerage is maintaining its 2025 Stock Exchange of Thailand index target at 1,250 points. "We view levels below 1,100 points as attractive buying opportunities. The market's recovery still relies on accommodative monetary policy, accelerated public investment and stable system liquidity," he said.
Straits Times
10-07-2025
- Business
- Straits Times
US-Vietnam trade deal has serious implications for South-east Asia
The agreement spares Vietnam from facing one of the steepest reciprocal tariff rates of any country at 46 per cent. Last week's announcement of the US-Vietnam trade deal was an important milestone for both Vietnam and the US. Although details are sparse, the agreement spares Vietnam from facing one of the steepest reciprocal tariff rates of any country at 46 per cent. The outcomes of the talks are not a one-off – they will have serious implications for other countries, particularly Vietnam's fellow Asean members. By sealing the first trade deal between the US and an Asian partner during the Trump administration's 90-day tariff pause, Vietnam becomes the trendsetter for its neighbours as they struggle to finalise their own deals or seek an extension to work through remaining difficult matters.
Business Times
10-07-2025
- Business
- Business Times
Vietnam plans new penalties for illegal transshipments after Trump deal
[HANOI] Vietnam is preparing stricter penalties to crack down on trade fraud and the illegal transshipment of goods, and has focused its inspections on Chinese products as it tries to comply with commitments made to Washington, documents seen by Reuters show. Last week, the Communist-ruled country struck a preliminary deal with US President Donald Trump's administration that cuts planned US tariffs on imports from Vietnam to 20 per cent from the 46 per cent level threatened in April. But goods that Washington deems to be illegally transshipped through Vietnam will be subject to a 40 per cent levy. The new measures, which expand a crackdown in recent weeks on trade fraud and imported counterfeits, will be key to keeping on Trump's good side. US officials have repeatedly accused Vietnam of being used as a waypoint for Chinese goods destined for the US. They allege some goods have 'Made in Vietnam' labels despite having received no or little added value in the country – allowing Chinese exporters to take advantage of Vietnam's lower tariffs and avoid high US duties on goods from China. The Vietnamese government will issue a new decree that will 'prescribe additional levels of sanctions for fraud of origin,' and introduce stricter measures and checks to prevent fraud, according to a Jul 3 trade ministry document. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Jul 3 was the same day that Trump and Vietnam's top leader To Lam reached their agreement, making the South-east Asian nation the only other country after Britain so far to reach a preliminary deal on tariffs. Vietnamese authorities have been told to intensify inspections on exports to the US, according to the document which said inspections have focused recently on products 'at risk of trade fraud... or Chinese items that are subject to trade defence measures by the European Union and the US'. The document cited wooden furniture, plywood, steel machine parts, bicycles, batteries, wireless headphones and other electronic products as examples. It listed examples of fraud such as the use of fake papers to obtain certification of origin documents, forged certificates of origin of goods and the import of counterfeit products into Vietnam. It added that trade fraud had increased in recent times and was focused on avoiding tariffs and trade defence measures. Vietnam's trade ministry and the Office of the US Trade Representative did not reply to Reuters requests for comment. Much unclear There remains much to be worked out in the US-Vietnam tariff deal. It is not yet clear how Washington will define an illegal transshipment and how much value Vietnam must add to imported products to avoid the 40 per cent tariff. Sources have said that the US is pushing Vietnam to reduce its reliance on imported components from China, especially for electronic devices. It is also not clear when the deal is likely to be finalised. Vietnam's government decree will introduce stricter procedures to monitor companies that self-certify the origin of the products they trade, increase scrutiny of traded goods with more on-site inspections and increase scrutiny of the issue of certificates of origin, according to an undated draft seen by Reuters. The draft decree does not currently list penalties, which are expected to be added in revisions or in other legal texts, said a person familiar with the process. The person was not authorised to speak on the matter and declined to be identified. Vietnam has nearly tripled its exports to the US since the start of the US-China trade war in 2018, when the first Trump administration imposed wide-ranging tariffs on Beijing, pushing some manufacturers to move production south. But as exports to the US boomed, Vietnam vastly expanded imports from China, with their inflow almost exactly matching the value and swings of exports to the US over the years, each totalling around US$140 billion in 2024, data from the US and Vietnam show. REUTERS
New Straits Times
10-07-2025
- Business
- New Straits Times
Vietnam plans new penalties for illegal transshipments after Trump deal, documents show
HANOI: Vietnam is preparing stricter penalties to crack down on trade fraud and the illegal transshipment of goods, and has focused its inspections on Chinese products as it tries to comply with commitments made to Washington, documents seen by Reuters show. Last week, the Communist-ruled country struck a preliminary deal with US President Donald Trump's administration that cuts planned US tariffs on imports from Vietnam to 20 per cent from the 46 per cent level threatened in April. But goods that Washington deems to be illegally transshipped through Vietnam will be subject to a 40 per cent levy. The new measures, which expand a crackdown in recent weeks on trade fraud and imported counterfeits, will be key to keeping on Trump's good side. US officials have repeatedly accused Vietnam of being used as a waypoint for Chinese goods destined for the United States. They allege some goods have "Made in Vietnam" labels despite having received no or little added value in the country – allowing Chinese exporters to take advantage of Vietnam's lower tariffs and avoid high US duties on goods from China. The Vietnamese government will issue a new decree that will "prescribe additional levels of sanctions for fraud of origin", and introduce stricter measures and checks to prevent fraud, according to a July 3 trade ministry document. July 3 was the same day that Trump and Vietnam's top leader To Lam reached their agreement, making the Southeast Asian nation the only other country after Britain so far to reach a preliminary deal on tariffs. Vietnamese authorities have been told to intensify inspections on exports to the United States, according to the document, which said inspections have focused recently on products "at risk of trade fraud… or Chinese items that are subject to trade defence measures by the European Union and the United States". The document cited wooden furniture, plywood, steel machine parts, bicycles, batteries, wireless headphones and other electronic products as examples. It listed examples of fraud such as the use of fake papers to obtain certification of origin documents, forged certificates of origin of goods and the import of counterfeit products into Vietnam. It added that trade fraud had increased in recent times and was focused on avoiding tariffs and trade defence measures. Vietnam's trade ministry and the Office of the US Trade Representative did not reply to Reuters' requests for comment. Much unclear There remains much to be worked out in the US-Vietnam tariff deal. It is not yet clear how Washington will define an illegal transshipment and how much value Vietnam must add to imported products to avoid the 40 per cent tariff. Sources have said that the US is pushing Vietnam to reduce its reliance on imported components from China, especially for electronic devices. It is also not clear when the deal is likely to be finalised. Vietnam's government decree will introduce stricter procedures to monitor companies that self-certify the origin of the products they trade, increase scrutiny of traded goods with more on-site inspections and increase scrutiny of the issue of certificates of origin, according to an undated draft seen by Reuters. The draft decree does not currently list penalties, which are expected to be added in revisions or in other legal texts, said a person familiar with the process. The person was not authorised to speak on the matter and declined to be identified. Vietnam has nearly tripled its exports to the United States since the start of the US-China trade war in 2018, when the first Trump administration imposed wide-ranging tariffs on Beijing, pushing some manufacturers to move production south. But as exports to the US boomed, Vietnam vastly expanded imports from China, with their inflow almost exactly matching the value and swings of exports to the United States over the years, each totalling around US$140 billion in 2024, data from the US and Vietnam show.
Indian Express
10-07-2025
- Business
- Indian Express
Thanks to Trump, uncertainty in the global trading system is likely to persist
The 90-day pause granted earlier on Donald Trump's reciprocal tariffs has come to an end. While Trump's team may have been hopeful of signing quick deals —in the initial days, there was talk of closing 90 deals in 90 days — the actual progress made by the administration has been considerably below expectations. Agreements have been struck only with the UK and Vietnam and a framework has been agreed upon with China. More deals are on the cards. Revenues, though, have surged. According to reports, US tariff revenues soared to $22.8 billion in May. Treasury Secretary Scott Bessent is hopeful of revenues touching $300 billion by the end of 2025. But, marked by unpredictability, Trump's tariff policy, on which questions of legality have also been raised, has only increased uncertainty in the global economy. The last few days have seen a flurry of tariff announcements. On Monday, Washington sent letters to 14 countries detailing the tariffs imposed on them. These are now effective from August 1. According to reports, US imports from these countries stood at $465 billion last year. The tariffs levied range from 25 to 40 per cent. Even US allies like Japan and South Korea have not been spared. Six of the 14 countries belong to ASEAN — Cambodia, Indonesia, Malaysia, Thailand, Laos, and Myanmar — a grouping that has deepened integration with China. As per reports, the letters, in line with the US-Vietnam agreement, which doubles the tariff for transshipped goods, also say that 'good transshipped to evade a higher tariff will be subject to that higher tariff'. This seems to be aimed at China. A recent note from Nomura, an investment house, had pointed out that 'Asia is experiencing a significant surge in imports from China, raising concerns about potential transshipment activities'. Countries such as Japan, Thailand and Malaysia have responded by saying that they'll continue to hold discussions and negotiate with the US. Trump, however, has not stopped there. Following his levies on commodities like steel and aluminium on Tuesday, he announced 50 per cent tariffs on copper. The markets reacted immediately — copper futures soared around 9 per cent. That's not all. The US President has also threatened to impose up to 200 per cent tariffs on pharmaceuticals. He has also warned that members of BRICS would face a 10 per cent tariff. Trump's tariff policies have upended the global trading architecture. The Global Trade and Research Initiative, a Delhi-based think tank, has underlined that these agreements do not meet WTO standards for FTAs. If Trump's past approach is anything to go by, there is a possibility that the tariffs imposed today could be revised tomorrow. The uncertainty in the global trading system is, therefore, likely to persist.
