Thai govt loans to cushion blow of Trump tariffs
According to Finance Minister Pichai Chunhavajira, the GSB loans will charge an interest rate as low as 0.01%, while the bank's cost of funds is around 2%. The government will bear the interest rate differential in order to support the liquidity and inventory carrying costs of domestic entrepreneurs, particularly for small and medium-sized enterprises (SMEs), during this current period of uncertainty.
For large companies, commercial banks will step in to help them. But if the burden exceeds commercial banks' capacity then the government will assist, said Mr Pichai.
He also addressed measures to prevent the subrogation of certificates of origin (COs) for exporting goods to America, saying it is still unclear what percentage of local content the US will require for products exported to its market.
However, it is expected to be higher than the current level of 40%, with the new requirement possibly rising to 60%, 70%, or even 80%, said Mr Pichai He added that for calculating local content for goods exported to the US, America will count domestic raw materials, including those sourced from the US and its allies, as part of efforts to manage competition with rival countries.
According to Mr Pichai, in the first round of negotiations with the US regarding market access, which aims at allowing American goods to enter the Thai market at a 0% or near-zero import tariff, Thailand proposed eliminating import duties on 69% of all imported goods from the US.
Later, Thailand pledged to eliminate import duties on up to 90% of all goods imported from the US and to remove various non-tariff barriers.
Once a final agreement is reached on the tariff negotiations with the US, the entire agreement must be submitted to the Thai House of Representatives for approval, Mr Pichai said.
He also noted that certain US goods which are not currently imported into Thailand will also be allowed to enter at a 0% tariff rate, in order to further expand market access and open up the Thai market to US automobiles.
Mr Pichai said the guiding principle in the negotiations is that a 0% import tariff for US goods should apply only to products that Thailand already needs to import or to those that can be produced domestically but in insufficient quantities.
"The impact of the Trump tariff measures should be seen as a crisis that presents an opportunity for Thailand to adapt and enhance the country's competitiveness," he said. "This is a bitter medicine for every country: we need to understand the situation and move in the same direction. We can't expect to gain 100% because it's a zero-sum game.'
He added that Thailand's economy relies heavily on exports — up to 58%, though this is down from a previous peak of 70%. Of that, 18% of Thai exports go to the US, which is relatively high.
Mr Pichai emphasised that negotiations with the US must ensure mutual benefit and balance, and the outcome must be sustainable — not just short-term fixes. This, he noted, is a challenging task.
Historically, the US has had a trade deficit with Thailand amounting to US$30 billion a year. Therefore, Thailand must open up its market to more US products. Nevertheless, of that $30-billion deficit, one-third consists of electronic goods such as notebook computers, most of which are produced in Thailand by US companies with manufacturing bases in the country.
According to Mr Pichai, these US companies have been operating in Thailand for 20-30 years, due to the availability of skilled labour that cannot easily be replaced in the US, as well as the presence of extensive supply chains. Relocating production out of Thailand would be nearly impossible. Products exported by these US firms in Thailand are often components used in America's artificial intelligence industry, he said.
At the same time, according to Mr Pichai, Thailand is committed to promoting Thai investment in the US, especially in sectors such as agricultural processing, including both human and animal food, along with investment in energy resource development. The US has relatively low energy costs, particularly natural gas, which is priced at just $2–$3 per million British thermal units (BTU), compared to $11 in the international market.
He added that Thailand must adapt by increasing reliance on its domestic economy. This includes maximising the use of domestic resources in production for overseas sales and diversifying export markets.
However, Mr Pichai cautioned that if the negotiations adversely affect third countries, Thailand must take that into consideration as well, since part of these negotiations involves geopolitical issues, and the country does not wish to bring foreign conflict into its own borders.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Bangkok Post
an hour ago
- Bangkok Post
Applications open for a groundbreaking leadership course at Chula's 'SoftEx 2025'
From today until July 31, applications are open for "SoftEx 2025"-- an exclusive executive training programme where the Creative Economy Agency (CEA), in collaboration with Chulalongkorn Business School (CBS), invites visionary leaders, policymakers and entrepreneurs to take part in reshaping Thailand's future through creativity and culture. This groundbreaking course -- the first of its kind in the country -- is designed to elevate Thai leadership by equipping participants with the tools needed to drive the creative economy and leverage soft power as strategic assets for national development. As the world shifts towards ideas, culture and innovation, creative economy and soft power have become essential engines for global influence. Countries like South Korea and Japan have demonstrated how storytelling, music, food and identity can redefine national brands and generate real economic value. Thailand already holds vast cultural capital -- from rich traditions and culinary excellence to music, design and the arts -- but lacks a unified, strategic mechanism to amplify these strengths. "SoftEx 2025" aims to fill that gap by building a new generation of leaders who can translate cultural potential into long-term, sustainable growth. Developed with input from top thinkers and global experts, "SoftEx 2025" offers a dynamic curriculum that blends theory with hands-on experience. The programme is anchored in two key areas: understanding the foundations of creative economy and soft power and crafting long-term strategies for sustainability. Through in-depth case studies, collaborative workshops and interactive lectures, participants will explore how to turn cultural identity into global influence, build effective brand narratives and integrate creative policy into public and private sector agendas. Participants will also gain first-hand experience through site visits to Thailand's leading creative cities and organisations that have successfully implemented soft power. Among the distinguished speakers and facilitators are names such as Dr Surapong Suebwonglee, Prof Dr Wilert Puriwat, Dr Chakrit Pichayangkul, Benjamin Webb and Assoc Prof Dr Wiriya Techarungroj. Together with international experts and creative pioneers, they will share real-world insights and strategies that participants can directly apply within their own contexts -- whether in business, government, or civic innovation. The course is also designed to foster dialogue and connection through panel discussions and networking opportunities to create a space for collaboration that extends well beyond the classroom. "SoftEx 2025" will run from August to September, with a total programme fee of 129,000 baht (inclusive of VAT and exclusive site visits). Graduates will receive a certificate from Chulalongkorn University, signifying not just completion of the course, but readiness to lead transformative change in the creative economy space. Beyond education, participants gain access to a powerful network of senior leaders across sectors -- an invaluable asset in advancing national initiatives and cross-sector collaborations rooted in culture and innovation.
Bangkok Post
an hour ago
- Bangkok Post
How to try and negotiate with Donald Trump
Since Donald Trump returned to the White House in January, it has been virtually impossible to keep up with all the extreme measures, incendiary rhetoric, personnel changes, policy reversals, and breaches of rules and norms, from intelligence leaks to defiance of court orders. That is by design: like European fascists in the twentieth century, Mr Trump knows that it is far easier to manipulate and suppress an overwhelmed, divided, and disoriented public than an informed, engaged, and assured one. The relentless stream of declarations, policy U-turns, and legal violations confuses Mr Trump's opponents, making it difficult to devise a clear strategy for resisting him. And the flood of often-false or misleading information, combined with continued appeals to popular grievances, prevents Mr Trump's supporters from recognising that he is often actively working against their interests. The international community, too, has been struggling to figure out how to respond to Mr Trump's behaviour, from his bombing of Iranian nuclear sites to his rejection of multilateral agreements. When it comes to tariffs, however, the path forward should be clear. On April 2, Mr Trump announced "reciprocal" tariffs on countries running trade surpluses with the United States. But on April 9 -- less than 24 hours after the tariffs took effect -- he announced a 90-day "pause", during which affected countries were supposed to reach new trade deals with the US. True to form, the Trump administration has just moved the deadline again: now, countries apparently have until Aug 1. Mr Trump's tariffs defy economic logic. A well-established theoretical framework, based on centuries of evidence, explains why international trade is fundamentally a win-win proposition: each country can produce and sell goods and services in the fields where it has a comparative advantage. Many factors can contribute to that advantage, from demographics to natural-resource endowments to technological innovation. Japan is better equipped than most other countries to produce and export high-quality cars, thanks to decades of technological development and trust-building in foreign markets. When everyone is making the most of their comparative advantages, living standards rise everywhere. The Trump administration, however, treats trade like a zero-sum game: if other countries are benefiting, then the US must be losing. Mr Trump hopes that by weaponising tariffs, he will secure "victories" for US industry. The problem is that the added costs fall primarily on domestic importers and are then passed on to consumers. The result is reduced access to foreign goods, weaker domestic competition, and higher prices. But Mr Trump either does not understand this, or simply does not care, and his supporters remain in thrall to his "Make America Great Again" myth-making. So, other countries feel considerable pressure to strike timely deals with his administration. They must resist that pressure. As game theory indicates, patience is crucial for finding cooperative solutions to seemingly intractable conflicts -- especially when the uncooperative party is showing impatience. Countries should also remain open to the possibility that trade negotiations can bring mutual benefits, particularly if their scope is broadened beyond industrial products, to include agricultural products and even security issues. Trade talks between the US and Japan are a case in point. So far, bilateral negotiations have focused not only on automobiles but also on rice, an industry that Japan protects with tariffs and subsidies. But reports of excess production capacity suggest that these protections are not doing Japan much good. Add to that high prices, and Japan has good reason to liberalise the sector, quite apart from facilitating a trade agreement with the US. Mr Trump's tactics have already motivated Europe to take responsibility for its own security. At last month's Nato summit, member countries committed to increasing their defence spending to 5% of GDP by 2035. Incorporating defence considerations into trade negotiations could prove constructive. Japan's share of defence spending was affected by the US occupation policy after World War II, which was intended to prevent Japan from becoming a major military power again. Now confronted with the military might of neighbouring China and North Korea, and with new demands for increased defence spending from the US, the Japanese will need to consider the issue seriously. None of this justifies Mr Trump's economically counterproductive, highly destabilising policies. But rather than become overwhelmed or distracted and end up striking unfavourable trade deals, countries must take their time, think strategically, and, where possible, bring mutually beneficial offers to the table. ©2025 Project Syndicate
Bangkok Post
an hour ago
- Bangkok Post
Safety key to nuclear goal
Nuclear energy has little support among Thai people. The recent news about a conservation group criticising the latest bilateral cooperation between the US and Thai government to upscale plans for small reactor module (SMR) technology is evidence of this. The latest anti-nuclear online mutterings are a reaction to the rekindled interest among Thai policymakers and investors in pursuing the controversial energy resource. Recently, the government and investors launched collaboration with foreign governments such as Denmark and the US, while local investors such as SET-listed Global Power Synergy (GPSC), the PTT group's power flagship, and Saha Pathanapibul International are also supporters of SMRs. They are joined by Thai academic institutes such as King Mongkut's University of Technology, which is promoting similar nuclear energy courses at its Lat Krabang and North Bangkok campuses. Today in Bangkok, the government and its backers will hold a seminar titled "A Global Dialogue on SMR Deployment". This development is good and welcome. Thailand must prepare to tap new energy resources to cater for the demand by manufacturers to produce low-emission goods. As well as fossil-power energy and intermittent renewable energy, the country must think about acquiring a stable power source to feed the exponential demand from data centres and AI operations. Much smaller in size -- around 15-300 megawatts, SMR technology is being touted as the next game changer for industrial sectors that require an on-site clean and stable energy supply. That means the public must be better informed. There must be a healthy debate on whether and how the country can make use of nuclear energy, given its inherent risks. It is essential that supporters of moves to embrace nuclear energy open their ears to public concerns instead of resorting to platitudes about how beneficial and safe the new technology will be. Likewise, opponents must open their hearts to new information. After all, the world has changed. For five decades, Thailand has tried and failed to develop nuclear energy. Those efforts have been marred by fearful reactions caused by the catastrophic nuclear accidents at Chernobyl in Ukraine in 1986 and Japan's Fukushima plant in 2011. But the real problem has always been a lack of trust in Thai officials and investors to handle public safety standards. It is certainly a valid point. In 2000, it took officials at the Atomic Energy Commission for Peace 17 days to find a spent cobalt-60 cylinder stolen from a warehouse by scrap metal workers who later opened it in one of their homes in Samut Prakan. Three later died from radiation sickness, while 1,872 community members were exposed to different levels of radiation. In 2023, a tube containing radioactive element Caesium-137 went missing from the National Power Plant 5A Company's facility in Prachin Buri province before later being found burned in a scrap metal factory. That means the public education drive must not be a PR campaign to force acceptance, either. After all, countries with good public approval ratings of their nuclear energy policies are all societies with trustworthy infrastructure, transparency and well-tested safety standards. Simply promoting new technology is not enough. Without public trust in officials' ability to handle safety, Thailand's quest for nuclear power plants will remain the same pipe dream it has been for the past five decades.
