Thailand announces tariffs strategy

[vinapu]

8 hours ago, macaroni21 said:

 

For a country of its wealth, its failure to provide public goods - public health, public housing, public safety, public education, public transport - and a decent social safety net is quite astounding.

 

great analysis and pleasure to read.

It reminded me very astute  observation made  by lady who moved to USA from one of East European countries at end of 80-ties and landed roughly the same job she hold at home .

She told me " they work  there ( in USA) 4 times as hard as we did at home  but their lives are perhaps only twice better at best. Where the difference goes ?" 

[reader]

PM sending team to US to negotiate over tariffs

From The Nation

The Thai delegation, led by Finance Minister Pichai Chunhavajira, will hold discussions with the US next week on mitigating the impact of US trade policies on Thai exports. 

This move follows US President Donald Trump’s announcement on Wednesday (April 2) of reciprocal tariffs on several countries, with Thailand facing a 37% reciprocal tariff on export goods to the US.

Prime Minister Paetongtarn Shinawatra said in a statement on Sunday that Pichai will travel to the US for talks with various sectors, including government bodies, the private sector and other stakeholders, concerning the significant changes in US trade policy, she explained.

“The Thai government will make it clear to its US counterparts that Thailand is not only an exporter, but also a reliable ally and long-term economic partner,” she said.

She explained that many other countries are in a similar position and are taking steps to lessen the impact. She expressed concern about the potential for a global trade war driven by tax mechanisms.

She added that numerous countries have chosen to enter negotiations with the US government. She said the policies would affect Thai exports, particularly electronics, processed foods and agricultural products.

Paetongtarn said Thai government has prepared proposals such as increasing imports of energy, aircraft, and agricultural products from the US, and initiating greater cooperation in agriculture, industry and other sectors.

Additionally, Thailand will seek to promote Thai investment in the US and reduce import barriers, including addressing the misuse of Thailand as a transit point for false origin claims, she said.

She also mentioned that Thailand’s team working to mitigate the impact of US trade policies will hold discussions on Tuesday, April 8.

Continues at

https://www.nationthailand.com/business/economy/40048405

[xpaulo]

On 4/5/2025 at 8:54 PM, macaroni21 said:

The Second World War was the coup de grace; aft

A German guy told me one of the consequences of Churchill demanding the bombing and destruction of west German cities whether they had military value or not was that Germany received American dollars to rebuild it's industrial capacity using modern equipment while Britiain had to rely on outdated factories giving the Germans a competitive edge. Don't know if that's true, but I guess Churchill had no reason to think during the war the United States would have to rebuild West Germany to counter the Soviet and East German threat.

[reader]

From Thai Enquirer

Economists in agreement on strategy

Economists are unanimous in their call that the Monetary Policy Committee (MPC) is likely to lower the interest rates during its next meeting this month as the Bank of Thailand could be one of the key agencies that would need to put its best foot forward to help rescue the possible impact of the ‘reciprocal tariff’ that was announced in the wee hours of April 3.

“We now view that the central bank may potentially respond with further easing of the policy rate further to support growth, given the immediate and significant downside risks on growth” Enrico Tanuwidjaja, economist at UOB in Singapore said.

Enrico says that given the uncertainties surrounding the tariff negotiations, weaker near-term outlook, exacerbated by the recent earthquake and low credit growth, he expects 2 (not just 1) additional 25 basis points (bps) rate cuts to be delivered each in April and June.

He says that by lowering the policy rate to 1.50% by the 2^nd quarter 2025 is something he expects, and additional cuts may follow if the growth outlook continues to deteriorate.

Other economists were in agreement that the central bank would need to take the lead in pushing for an economic recovery. Pipat Luengnaruemitchai, economist at Kiatnakin Phatra Securities, came out to say that there is a higher risk from the US trade policy is another headwind to the broker’s baseline growth forecast.

“We continue to expect 2 more rate cuts in 2025 and another cut in 2026, with risk of further cuts, considering the downside risk from slower tourism, earthquake, and the US tariffs,” Pipat said.

Pipat said that he now thinks the MPC will cut rates in its April meeting after this tariff announcement due to rising uncertainties which could have a negative impact on growth. Notably, the MPC no longer expressed concerns about household debt, which had been the key reason not to cut.

Enrico of UOB says that on the monetary policy front, he believes there is still room for the central bank to further ease the policy rate to support growth and the broader economy, given the BoT’s recent policy stance, which prioritizes growth.

Continues at

https://www.thaienquirer.com/54060/analysis-economists-are-unanimous-that-monetary-policy-could-be-key-to-mitigating-impact-from-trumps-tariff/

[bkkmfj2648]

I hope that Washington does not accuse Thailand of currency manipulation as part of the tariff calculations - as this had been a concern in the past.

Grok seems to think that currently, currency manipulation of the Thai baht was a factor in setting the calculated tariff.  Let us hope that this remains true in light of the above stated article of possibly 2 additional Thai baht rate cuts and perhaps 1 more additional rate cut in year 2026.

[bkkmfj2648]

This morning I watched an excellent speech given by the PM of Singapore, Mr. Lawrence Wong.

He makes an interesting point which I had not dwelled on much.  Trump's tariffs are focused only on "goods" and NOT on "good and services".

In many countries around the world the USA does indeed have a trade deficit.

BUT, with many countries around the world, the USA has a sizeable trade surplus - if "services" were included in the analysis.

The other alarming point that the PM makes is that this could be the turning point in global trade - where the trade regime moves from multilateral to unilateral - thus going against the origins of the WTO (World Trade Organization).

I would say that this 23 minute speech is well worth a listen.

 

 

[10tazione]

3 hours ago, bkkmfj2648 said:

BUT, with many countries around the world, the USA has a sizeable trade surplus - if "services" were included in the analysis.

EU is one of those "countries". In addition, the trade deficit for goods was not calculated correctly (on purpose, my guess).

But EU is so lame. They had a meeting on monday to talk about how they would react to the tariffs that where imposed a month ago ... not about the 20% tariffs starting today.

What also puzzles me is why the rest of the world doesnt stand together. Each country alone is an easy prey.

[bkkmfj2648]

8 minutes ago, 10tazione said:

What also puzzles me is why the rest of the world doesnt stand together.

Already Italy is going independently of the EU pact to try to save its export industries.

https://www.bloomberg.com/news/articles/2025-04-08/italy-s-meloni-set-to-visit-us-next-week-to-press-trump-on-trade?embedded-checkout=true

https://www.reuters.com/world/italys-meloni-meet-trump-april-17-tariff-talks-2025-04-08/

I lived in Italy for 12 years and Hungary for 8 years and EU "cohesion" was often not very cohesive when there are 27 independent countries to align with Brussel's dictates.

[PeterRS]

20 hours ago, bkkmfj2648 said:

I hope that Washington does not accuse Thailand of currency manipulation as part of the tariff calculations - as this had been a concern in the past.

If Washington does come up with that accusation, I trust someone in the USA will recall that Trump will effectively be calling the kettle BLACK! In the 1980s, the Reagan administration accused Japan of maintaining too low an exchange rate in order to boost its exports. It then used a number of measures to 'persuade' Japan that it had to increase the value of the ¥. From around US$1 = ¥250 when I started visiting the country in 1981, the rate by the time I left in 1992 after two years working there was close to US$1 = ¥115. This was entirely due to US pressure. And of course one indirect effect was that Japan endured an entire decade of deep recession in the 1990s.

[reader]

Trying to make mathematical sense of Trump's tariff formula left me scratching my head because it was so easy to get lost in the weeds. This morning I came across this CNN piece which makes what I believe is the best attempt to do something logical with a seemingly illogical process.

======

Breaking out whiteboard to explain Trump’s tariff math

https://edition.cnn.com/2025/04/08/politics/video/trump-tariff-math-digvid

[TMax]

This video exposes the mistake in the calculation 

 

[vinapu]

On 4/9/2025 at 7:36 AM, TMax said:

This video exposes the mistake in the calculation 

 

thank you for pointing it out , I wonder how I could miss it at the first time, lol

[vinapu]

fact that many countries are charging much higher tariffs than outer way around can be easily explained.

In places lacking universal income tax scheme  it one of main sources of government income. Otherwise how country where 3 or 7 % of population pays income tax funds itself ?

 We never hear about tax filling frenzy in Cambodia or Laos like we have in many countries around this  time of year