How trade tensions are really affecting the global economy
Companies are not yet rushing to relocate production to the US, but investment and dealmaking have already slowed.
Now, as countries clamour to strike fresh deals with Mr Trump before the July 9 deadline, deep unease still lingers through global boardrooms and supply chains.
When Britain became the first country to reach a trade agreement with the US in May, after President Donald Trump's announcement of sweeping 'reciprocal' tariffs, it was hailed as a blueprint for other key US trading partners.
But almost two months passed before a second country – Vietnam – was able to strike a deal. Meanwhile, details of the British accord are still unclear, unconfirmed or subject to potential revision.
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Business Times
12 minutes ago
- Business Times
Thailand to offer US more trade concessions to avert 36% tariff
[BANGKOK] Thailand is making a last-ditch effort to avert a punitive 36 per cent export levy threatened by the Trump administration with offers of greater market access for US farm and industrial goods, along with increased purchases of energy and Boeing jets. Bangkok's latest proposal aims to boost bilateral trade volume and reduce Thailand's US$46 billion trade surplus with the US by 70 per cent within five years, reaching balance in seven to eight years, Finance Minister Pichai Chunhavajira told Bloomberg News in an interview late on Sunday (Jul 6). That's quicker than the pledge to wipe the gap in a decade under an earlier proposal submitted by Thailand. Pichai expects to submit the revised offers before Jul 9 – the end of the 90-day tariff pause announced by President Donald Trump. If accepted, Thailand can immediately waive import tariffs or non-tariff barriers for a majority of the products, while phasing out restrictions more gradually for a smaller set of goods, he said. The revisions followed Pichai's meeting on Thursday with US Trade Representative Jamieson Greer and Deputy Secretary of Treasury Michael Faulkender in the first ministerial-level tariff talks. As many of the US products which will gain greater access into the Thai market are in short supply locally, they are unlikely to hurt local farmers or producers, Pichai said. 'What we're offering them is a mutually beneficial proposal,' Pichai said. 'The US can trade more with us and we get to the chance to clean up our process and cut red tapes.' Thailand is one of several countries racing to finalise a deal with the US and avoid steep tariffs. Failure to secure a reduced tariff with its largest export market could result in a sharp decline in merchandise shipments and shave as much as one percentage point off Thailand's projected economic growth. 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 Neighbouring Vietnam secured a deal last last week, with Trump announcing a 20 per cent tariff on its exports and a 40 per cent rate on goods deemed to be transshipped. Thailand is pushing for a best-case rate of 10 per cent, Pichai said, adding that even a range of between 10 per cent to 20 per cent would be acceptable. 'The worst thing that can happen is we get the worst deal out of our regional neighbours.' Thailand has also made more 'aggressive' adjustments to plans for purchasing US energy – particularly liquefied natural gas – and Boeing aircraft, which are expected to significantly reduce the trade imbalance, Pichai said. Thai petrochemical companies including SCG Chemicals and PTT Global Chemical have pledged to import more US ethane. PTT has said it could buy two million tonnes of LNG from the Alaska gas project annually over a 20-year term, while state-controlled companies are exploring interests in co-developing the project. National flag carrier Thai Airways has indicated it could buy as many as 80 Boeing jets in the coming years. Securing a lower US tariff rate is seen as key to insulating Thailand's trade-dependent economy from further downside. Growth is already under pressure from South-east Asia's highest household debt and sluggish domestic consumption. A favourable deal would also help ease investor concerns stoked by political turmoil following the court-ordered suspension of Prime Minister Paetongtarn Shinawatra over alleged ethical misconduct in handling a border dispute with Cambodia. Thailand's exports have surged about 15 per cent in the first five months of the year, driven largely by front-loaded orders during the 90-day pause on proposed high tariffs. BLOOMBERG
Straits Times
19 minutes ago
- Straits Times
Tariffs will kick in on August 1 barring trade deals: US Treasury Secretary
Sign up now: Get ST's newsletters delivered to your inbox Many of the US' trade partners have begun negotiations in a bid to avoid the elevated duties. WASHINGTON - US tariffs will kick in on August 1 if trading partners from Taiwan to the European Union (EU) do not strike deals with Washington, Treasury Secretary Scott Bessent said on July 6. The rates will 'boomerang back' to the sometimes very high levels which President Donald Trump had announced on April 2 – before he suspended the levies to allow for trade talks and set a July 9 deadline for agreement, Mr Bessent told CNN. He confirmed comments by Mr Trump to reporters aboard Air Force One on July 4 in which he also cited a new deadline: 'Well, I'll probably start them on August 1. Well, that's pretty early. Right?' The president said he had signed 12 letters to be sent out , likely on July 7. The tariffs were part of a broader announcement in April where Mr Trump imposed a 10 per cent duty on goods from almost all trading partners, with a plan to step up these rates for a select group within days. But he swiftly paused the hikes until July 9 , allowing for trade talks to take place. Countries have been pushing to strike deals that would help them avoid these elevated duties. So far, the Trump administration has unveiled deals with the United Kingdom and Vietnam, while Washington and Beijing agreed to temporarily lower staggeringly high levies on each other's products. Mr Bessent said the administration was 'close to several deals.' 'I would expect to see several big announcements over the next couple of days,' he said. But he would not say which countries he was referring to, adding: 'I don't want to let them off the hook.' As his July 9 deadline approaches, Mr Trump has repeatedly said he plans to inform countries of US tariff rates by sending them letters. Aboard Air Force One on July 4, Trump said sending notices would be much easier than 'sitting down and working 15 different things... this is what you have to pay, if you want to do business (with) the United States.' Mr Bessent pushed back at CNN host Dana Bash's assertion the administration was using threats rather than negotiations, and denied that Mr Trump was setting a new deadline with the August 1 date. 'It's not a new deadline. We are saying, this is when it's happening. If you want to speed things up, have at it. If you want to go back to the old rate, that's your choice,' he said. He said the playbook was to apply 'maximum pressure' and cited the EU as an example, saying they are 'making very good progress' after a slow start. EU and US negotiators are holding talks over the weekend, and France's finance minister said on July 5 that he hoped they could strike a deal this weekend. Other countries were still expressing unease, however. Japan's Prime Minister Shigeru Ishiba said on July 6 he 'won't easily compromise' in trade talks with Washington. And Brics leaders meeting in Rio de Janeiro are expected to decry the tariffs on July 6, saying they are illegal and risk hurting the global economy. AFP
CNA
37 minutes ago
- CNA
New US tariff rates to kick in Aug 1 barring trade deals: Treasury Secretary
WASHINGTON: US tariffs will kick in on Aug 1 if trading partners from Taiwan to the European Union do not strike deals with Washington, Treasury Secretary Scott Bessent said on Sunday (Jul 6). The rates will "boomerang back" to the sometimes very high levels which President Donald Trump had announced on Apr 2 - before he suspended the levies to allow for trade talks and set a Jul 9 deadline for agreement, Bessent told CNN. Bessent confirmed comments by Trump to reporters aboard Air Force One on Friday in which he also cited a new deadline: "Well, I'll probably start them on Aug 1. Well, that's pretty early. Right?" The president said he had signed 12 letters to be sent out, likely on Monday. The tariffs were part of a broader announcement in April where Trump imposed a 10 per cent duty on goods from almost all trading partners, with a plan to step up these rates for a select group within days. But he swiftly paused the hikes until Jul 9, allowing for trade talks to take place. Countries have been pushing to strike deals that would help them avoid these elevated duties. So far, the Trump administration has unveiled deals with the United Kingdom and Vietnam, while Washington and Beijing agreed to temporarily lower staggeringly high levies on each other's products. As his Jul 9 deadline approaches, Trump has repeatedly said he plans to inform countries of US tariff rates by sending them letters. Aboard Air Force One on Friday, Trump said sending notices would be much easier than "sitting down and working 15 different things ... this is what you have to pay, if you want to do business (with) the United States." Bessent pushed back at CNN host Dana Bash's assertion the administration was using threats rather than negotiations, and denied that Trump was setting a new deadline with the August 1 date. "It's not a new deadline. We are saying, this is when it's happening, if you want to speed things up have at it. If you want to go back to the old rate that's your choice," he said. He said the playbook was to apply "maximum pressure" and cited the European Union as an example, saying they are "making very good progress" after a "slow start."
