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Business Times
3 days ago
- Business
- Business Times
Thailand to offer Trump no duties on 90% of goods, adviser says
[BANGKOK] Thailand is set to offer scrapping tariffs on 90 per cent of US goods, up from a previous plan for over 60 per cent, in a bid to avert a punishing levy threatened by US President Donald Trump, according to a business group advising Thai negotiators. Bangkok's third proposal would potentially eliminate tariffs and non-tariff barriers on about 10,000 US products, Chanintr Chalisarapong, vice-chairman of the Thai Chamber of Commerce, told Bloomberg News in an interview on Thursday (Jul 16). He added that he expects the final tariff on Thailand will be set in a range of 18 to 20 per cent – down from Trump's most recent threatened level of 36 per cent. The new proposal, which will be presented to Washington in a conference call on Thursday, could reduce Thailand's US$46 billion trade surplus with the US by 70 per cent within three years and lead to balanced trade within five years, according to Chanintr. The new figures are even more ambitious than Thailand's Jul 6 offer to cut tariffs on over 60 per cent of products and eliminate the trade gap in seven or eight years. 'I expect our proposal to be solid and practical. The numbers should be satisfactory to the US,' said Chanintr, who's consulted with negotiators led by Finance Minister Pichai Chunhavajira over the past week to finalise details. 'What we'll be offering is potentially more than Indonesia and Vietnam,' he said. 'Since we're a manufacturing country, we have potential to use a lot more US goods and process them into products that we can export.' 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 Thailand is one of the South-east Asian countries racing to finalise terms with the US. Failure to secure a reduced tariff with its largest export market, which accounted for about 18 per cent of Thailand's total shipments last year, could result in a sharp decline in merchandise shipments and shave as much as one percentage point off its projected export-driven economic growth. Trump has announced deals for 20 per cent tariffs on Vietnamese goods and 19 per cent for Indonesia, though transshipments through both countries would face higher levies. Bangkok rushed to sweeten its proposal after Trump announced last week that the 36 per cent tariff level on Thailand would start Aug 1. Pichai, who had submitted a second proposal by then, said he was shocked and had been expecting a lower number. Thailand's new proposal may include a tax exemption for US digital services that operate in Thailand or serve Thai customers, Chanintr said. It may also pledge more imports of liquefied natural gas, Boeing planes, and key US food and agricultural products. The latter could include corn, soybeans and barley, which are important to Trump voters in rural states, he added. Cheap US food and farm products are expected to help cut costs for the Thai pet food industry, which exports heavily to other countries. Lower costs for Thailand's animal feed industry will also likely boost productivity for the domestic poultry, livestock, and food-processing industries down the value chain, Chanintr said. Pichai, who has said he was pushing for a best-case rate of 10 per cent, is expected to hold more talks with US Trade Representative Jamieson Greer. In their meeting in Washington earlier this month, Pichai agreed to cut import taxes for US products that are in short supply in Thailand and tighten rules to prevent transshipments. 'We'd like for talks to conclude soon so that trade can continue. There's been too much uncertainty,' Chanintr said, adding he is confident Thailand can secure a deal before Aug 1. 'We're so close to the finish line.' Thai growth is already under pressure from South-east Asia's highest household debt and sluggish domestic consumption. A favourable deal would also 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 rose about 15 per cent in the first five months of the year, driven largely by frontloading during the 90-day pause to allow tariff talks. 'This is a global trade war, not a bilateral one,' Chanintr said. 'Don't forget how high the stakes are.' BLOOMBERG
Business Times
4 days ago
- Business
- Business Times
Indonesia bends to Trump's trade terms to avoid 32% tariff blow
[JAKARTA] In a move that underscores the bargaining power of the US under President Donald Trump's trade-first agenda, Indonesia has agreed to eliminate tariffs on American goods and commit to billions in US purchases in exchange for reduced tariffs on its own exports. The deal, which has helped South-east Asia's largest economy avoid a major trade setback, will see the US reduce tariffs on Indonesian exports from a threatened 32 per cent to 19 per cent. Earlier this month, Vietnam also reached a deal with Washington that lowered tariffs on its exports to 20 per cent; in return, it granted the US tariff-free access to its market. While the agreement secures Indonesia's continued access to the US market, analysts warn the deal is heavily skewed in favour of the US, requiring significant trade-offs. David Sumual, chief economist at Bank Central Asia, described the deal as 'a necessary compromise' to preserve Indonesia's competitiveness in the US market. The 19 per cent tariff is just below Vietnam's 20 per cent and Bangladesh's 35 per cent, two key rivals in major export sectors such as textiles, footwear and apparel. 'What matters most is preserving jobs at home,' Sumual said. 'Indonesia's labour-intensive industries rely heavily on the US market.' 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 Under the deal, announced by Trump on Truth Social late Tuesday (July 15), apart from removing tariffs on US goods, Indonesia has also pledged to purchase US$15 billion worth of American energy products and US$4.5 billion in agricultural goods, and increase orders for Boeing aircraft. The US imposition of a 19 per cent tariff on Indonesian exports, though lower than the previously threatened 32 per cent, still marks an increase from the current baseline of around 10 per cent. Sector-specific tariff details have yet to be disclosed. The Indonesian government has yet to release an official statement, though a spokesperson from the Coordinating Ministry for Economic Affairs said a joint announcement is forthcoming. Brian Lee, economist at Maybank, said it's no surprise that the trade deals being struck by Trump are so-called 'unequal' given the US wields significant leverage given its large consumer market. 'Trump is likely in less urgency to strike additional deals given that higher US inflation has been slow to materialise and agreements had been struck to lower tariffs on China and Vietnam, the two key sources of consumer goods imports to the US,' he said. Throw a lifeline Indonesia is the second member of Asean, after Vietnam, to seal a trade deal following the White House's tariff notification letters to more than 20 countries. Trump claimed he spoke directly by phone with President Prabowo Subianto to finalise the agreement. The deal guarantees key Indonesian exports, including textiles, footwear, electronics and commodities, retaining access to the US – which is Indonesia's second-largest trading partner. Indonesia ran a US$17 billion trade surplus with the US last year. Meanwhile, the US may seek increased access to Indonesia's strategic natural resources such as copper. The concessions by Indonesia to secure continued access to the US market are sparking anxiety among local industry players. On pins and needles Redma Gita Wirawasta, chairman of the Indonesian Fiber and Filament Yarn Producers Association, expressed mixed feelings about the deal. 'A 19 per cent tariff is still a burden, but manageable. It helps us stay competitive, which is a relief, especially for downstream industries.' However, he warned that Indonesia's competitive edge could disappear quickly, depending on how the US finalises trade deals with other major exporters – especially China, the world's largest textile producer and exporter. 'If China secures a lower tariff than us, we'll be at a disadvantage. If their tariff is higher, we could capture some of their market share but that also brings risks, like transshipment problems or dumped Chinese goods flooding our own market.' While the trade deal provides Indonesia some relief through lower tariffs, analysts caution that the gains come with serious risks. Harry Su, managing director and research and digital production at Samuel Sekuritas, said the agreement heavily tilts in favour of the US, leaving vulnerable sectors – particularly poultry and corn – exposed to a flood of cheaper American imports. Without protective measures, he said millions of Indonesian jobs could be at stake. Indonesia is a major corn importer, with annual imports averaging around US$250 million, primarily for animal feed. These imports have placed pressure on small-scale and vulnerable local farmers, who struggle to compete with cheaper foreign corn. 'If American corn can freely enter Indonesia, our local farmers will also perish as our production costs are much higher than in the US,' he said. The Indonesian negotiation team, led by Coordinating Minister for Economic Affairs Airlangga Hartarto, has visited the US twice to meet with the US Trade Representative. Indonesia has pledged to address the trade imbalance by increasing purchases of American energy, cotton and wheat, as well as streamlining import licensing processes. The US highlighted Indonesia's non-tariff barriers, among other issues, as major sticking points during the negotiations. Lee from Maybank said easing barriers to US investments could be a positive for Indonesia if it improves the business environment and attracts more foreign direct investment to Indonesia over time, possibly in the strategic minerals space such as copper and nickel smelting. The timing of the deal also reflects Indonesia's attempt to secure certainty ahead of the Aug 1 deadline, while other countries, such as India and China, remain in negotiations. Lee said it may be too early to gauge the relative competitiveness of Indonesia's 19 per cent tariff compared to the US' other trading partners. Su from Samuel Sekuritas highlighted that Indonesia's new agreement with the US raises important questions about how China, its closest and largest trading partner, will perceive this shift. 'It's the elephant in the room', he added.
Business Times
4 days ago
- Business
- Business Times
Tech export growth outpaces non-tech in Asia, with widest gap in Thailand: Nomura
[SINGAPORE] The divide between technology and non-technology exports growth in Asia is set to widen even further, according to a Jul 11 report from Nomura. The three-month moving average for tech exports growth in Asia ex-Japan rose to 30.5 per cent year on year in May, from 17.1 per cent in January. By contrast, non-tech exports grew 5.7 per cent, versus 2.1 per cent. 'Tech exports and production have rebounded strongly in recent months, while non-tech has been tepid,' said Nomura analysts. The divergence is the largest in Thailand, where the three-month moving average for tech exports grew 57.5 per cent year on year while non-tech exports increased 9.2 per cent. India, Taiwan, Indonesia, Malaysia, South Korea and Singapore also followed a similar trend. Front-loaded demand from the US, ahead of potential tariffs on semiconductors, have boosted tech exports. Additionally, rising memory chip prices have raised the value of chip exports and a Chinese consumer goods trade-in programme have increased demand for electronic components, according to the report. 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 Artificial intelligence (AI) demand has driven Taiwan's tech export growth, while India's electronics exports have been boosted by the shift in smartphone assembly. Conversely, non-tech exports have underperformed due to weak demand and pricing, as well as Chinese overcapacity. 'Demand outside the US remains tepid, including in Europe and China, reflecting soft consumption and structural factors. Within Asia, domestic consumption is also subdued across Indonesia, Korea, Thailand and India, reflecting the lagged effects of policy tightening and pandemic scarring effects,' Nomura analysts wrote. Demand for AI should rise in H2 Looking ahead, the divergence is likely to widen even further in the second half of 2025, said Nomura economist Toh Si Ying, in response to a query from The Business Times. AI tech demand is set to be 'the only bright spot', while non-AI tech will likely slow down after the third quarter, and non-tech exports will stay weak. US tariffs are also set to dent demand for non-AI tech, as real purchasing power for US consumers will be eroded. The lower multiplier effects of AI-driven growth on upstream sectors – compared to investment in traditional infrastructure like roads – will lead to strong AI growth, but weaker non-AI tech and non-tech growth. Regional growth is thus set to slow, with Asean nations particularly vulnerable due to front-loaded demand, high exposure to Chinese overcapacity and US scrutiny on transshipments. To be sure, the divergent trend is not uniform across every Asian country. In China, non-tech export growth outpaced tech by 2.4 percentage points, while the Philippines had an even larger gap in favour of non-tech exports – at 21 percentage points. Even before Trump 2.0, Asia was already dealing with a flood of cheap Chinese imports, making it harder for other countries to compete, said the report. 'Increased competition from China is weighing on industrial production (Thailand, Indonesia), delaying private capex (India), resulting in job losses in labour-intensive sectors (Indonesia, Thailand), adding to disinflation (metals, chemicals) and eating into export market share globally in non-tech sectors.
Business Times
4 days ago
- Business
- Business Times
Trump sets 19% tariff on Indonesia goods in latest deal, EU readies retaliation
[WASHINGTON] US President Donald Trump on Tuesday (Jul 15) said the US would impose a 19 per cent tariff on goods from Indonesia under a new agreement with the South-east Asian country and said more deals were in the works as he continued to press for what he views as better terms with trading partners and a path to reducing a massive US trade deficit. The pact with the relatively minor US trading partner is among the handful struck so far by the Trump administration ahead of an Aug 1 deadline for tariffs on most US imports to rise again, and it came as the top US trading partner - the European Union - readied retaliatory measures should talks between Washington and its top trading partner fail. As that deadline approaches, talks were underway with other trading partners eager to avoid yet more levies being imposed on their exports to the US beyond a baseline 10 per cent on most goods that has been in place since April. It is a policy regime - rolled out often chaotically by Trump - that has upended decades of trends toward lower trade barriers, often roiling global financial markets and economic activity along the way. Based on Trump tariff announcements through July 13, Yale Budget Lab estimates the US effective average tariff rates will rise to 20.6 per cent from between 2 per cent and 3 per cent before Trump's return to the White House in January. Consumption shifts would bring the rate down to 19.7 per cent, but it's still the highest since 1933. 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 Trump outlined an Indonesia deal that had rough contours resembling a pact struck recently with Vietnam, with a flat tariff on exports to the US roughly double the current 10 per cent and no levies placed on US exports going there. It also included a penalty rate for so-called transhipments of goods from China via Indonesia, and a commitment to buy some U.S. goods. 'They are going to pay 19 per cent and we are going to pay nothing ... we will have full access into Indonesia, and we have a couple of those deals that are going to be announced,' Trump said outside the Oval Office. In addition, Trump said later on his Truth Social platform that Indonesia had agreed to buy US$15 billion of US energy products, US$4.5 billion of American farm products and 50 Boeing jets, though no time frame for the purchases was specified. Trump: India talks moving same way Indonesia's total trade with the US - totalling just under US$40 billion in 2024 - does not rank in the top 15, but it has been growing. US exports to Indonesia rose 3.7 per cent last year, while imports from there were up 4.8 per cent, leaving the US with a goods trade deficit of nearly US$18 billion. The top US import categories from Indonesia, according to US Census Bureau data retrieved on the International Trade Centre's TradeMap tool, last year were palm oil, electronics equipment including data routers and switches, footwear, car tires, natural rubber and frozen shrimp. Susiwijono Moegiarso, a senior official with Indonesia's Coordinating Ministry for Economic Affairs, told Reuters in a text message: 'We are preparing a joint statement between US and Indonesia that will explain the size of reciprocal tariff for Indonesia including the tariff deal, non-tariff and commercial arrangements. We will inform (the public) soon.' Trump had threatened the country with a 32 per cent tariff rate effective from Aug 1 in a letter sent to its president last week. He sent similar letters to roughly two dozen trading partners this month, including Canada, Japan and Brazil, setting blanket tariff rates ranging from 20 per cent up to 50 per cent, as well as a 50 per cent tariff on copper. The Aug 1 deadline gives the targeted countries time to negotiate agreements that could lower the threatened tariffs. Some investors and economists have also noted Trump's pattern of backing off his tariff threats. Since launching his tariff policy, Trump has clinched only a few deals despite his team touting an effort to bring home '90 deals in 90 days.' So far, framework agreements have been reached with the United Kingdom and Vietnam, and an interim deal has been struck with China to forestall the steepest of Trump's tariffs while negotiations continue between Washington and Beijing. Trump said talks with India were moving in a similar direction. 'India basically is working along that same line. We're going to have access to India. And you have to understand, we had no access into any of these countries. Our people couldn't go in. And now we're getting access because of what we're doing with the tariffs,' he said. EU readies retaliation The breakthrough with Indonesia came as the European Commission, which oversees trade for the EU, gets set to target 72 billion euros (S$108.1 billion) worth of U.S. goods - from Boeing aircraft and bourbon whiskey to cars - for possible tariffs if trade talks with Washington fail. Trump is threatening a 30 per cent tariff on imports from the EU from Aug 1, a level European officials say is unacceptable and would end normal trade between two of the world's largest markets. The list, sent to EU member states and seen by Reuters on Tuesday, pre-dates Trump's move over the weekend to ramp up pressure on the 27-nation bloc and responds instead to US duties on cars and car parts and a 10 per cent baseline tariff. The package also covers chemicals, medical devices, electrical and precision equipment as well as agriculture and food products - a range of fruits and vegetables, along with wine, beer and spirits - valued at 6.35 billion euros. Following a meeting of EU ministers in Brussels on Monday, officials said they were still seeking a deal to avoid Trump's heavy tariff blow. But EU trade chief Maros Sefcovic said those at the meeting expressed unprecedented resolve to protect EU businesses using European countermeasures if negotiations with Washington fail to produce a deal. REUTERS
Business Times
5 days ago
- Business
- Business Times
Singapore ranks among top cities for tech talent as AI job listings surge globally: report
[SINGAPORE] Singapore has emerged as a top contender in the global tech talent race, tying for fourth place in a global talent acquisition ranking, according to a report released on Wednesday (Jul 9). It tied for fourth place alongside Mumbai and Chennai – and is the only non-Indian city in the top five, indicated the report by Colliers, a global professional services and investment management company. 'Singapore is the only non-Indian market in the top five, driven by strong one-year hiring and a high volume of open job posts, signalling a concentrated effort to hire for the 10 key tech occupations,' Colliers said. Colliers said that the talent acquisition category provides insight into the markets that are currently driving job posts and recruiting activity, reflecting the global demand for tech talent. In a separate one-year hiring index, Singapore ranks eighth globally, reflecting sustained but slightly lower short-term hiring momentum compared with Indian counterparts. Its strong showing was attributed to robust one-year hiring activity and a high volume of open job postings across key technology roles – including in fast-growing areas like artificial intelligence (AI). 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 Singapore ranked alongside heavyweights such as Beijing, Bengaluru and Tokyo. Other Asia-Pacific markets on the rise include Seoul and Sydney, both of which have seen increased demand for AI and cybersecurity talent. Mike Davis, Colliers' managing director of occupier services for Apac, said: 'Apac is drawing significant global attention for its unmatched tech talent density and strong venture capital momentum, particularly in India and China.' The report assessed more than 200 global markets based on these factors: talent acquisition and pipeline, venture capital funding, labour index strength and sector composition. The results underscore a widening polarisation in global tech talent – with the United States, China and India accounting for a disproportionate share of top-performing markets, the report indicated. The San Francisco Bay Area, Seattle and New York City secured three of the top five spots globally, reinforcing the US' leadership in innovation and tech workforce. Meanwhile, India and China each had five cities in the global top 50, highlighting their growing influence in digital economy growth, according to the report. Notably, 36 per cent of the world's tech talent now resides in just 10 global tech cities. 'Global tech talent is becoming increasingly concentrated in a few key hubs, with cities in the US and India leading the way. Although 22 countries have cities ranked in our top 50, the data points to a growing polarisation – especially in AI talent – towards these dominant markets,' Colliers said. India continues to cement its status as a global tech talent powerhouse, holding four of the top five spots in talent acquisition and having all six of its featured cities within the top ten. Bengaluru leads the pack. 'The proportion of younger workers in the tech sector continues to rise. Between 2014 and 2022, the number of employees under 25 grew by 9 per cent – a rate over 20 times the all-industry average. This trend is shifting attention to cities with younger talent pools, such as Bengaluru, Hyderabad and Mexico City,' the report indicated. 'Bengaluru boasts the world's largest pool of data scientists, while Beijing leads the region in tech sector productivity. Meanwhile, cities such as Tokyo, Seoul, Sydney and Singapore are emerging as world-class innovation hubs. These markets aren't just supporting global tech expansion – they're leading it,' it added. AI shakes up talent strategy One of the most significant shifts highlighted in the report is the soaring demand for AI-related expertise. Globally, job listings that require AI skills have surged, while traditional IT postings have declined. Citing recent research by the University of Maryland, the report said the number of new AI job listings have risen 68 per cent since ChatGPT launched in late 2022. By contrast, the number of traditional IT job postings fell 27 per cent in the same period. This is putting cities with strong AI ecosystems – such as Bengaluru, New York and Sao Paulo – in the spotlight for employers. odie Poirier, the president of Colliers' occupier services for the Americas, said: 'As generative AI reshapes talent strategies, we're seeing a significant shift in how companies prioritise location decisions.' 'In the Americas, tech talent hubs like San Francisco and New York remain vital, but markets like Mexico City and Sao Paulo are quickly gaining ground. Organisations need to move fast, make data-informed choices, and align workforce planning with long-term business goals,' she added. Competition for data scientists, information security analysts Competition for data scientists is 'particularly strong,' said Colliers, noting that they are 'critical' to the AI industry, as they develop models that turn large amounts of data into insights and patterns. Demand for data scientists is expected to grow by 36 per cent through 2032 – the highest rate of any tech jobs, it added. 'Interestingly, our research finds that regional hubs of data scientists are emerging in response to increased hiring demand – driven by the need to support large language models and broader AI integration efforts,' the report indicated. It said Bengaluru has the world's largest pool of data scientists, including the biggest workforce in the Apac region. In the Americas, the San Francisco Bay Area and New York City lead, while London and Paris offer the highest concentrations of data science talent in the Europe, the Middle East and Africa region. Another role is also emerging: information security analysts. Demand for this role is 'skyrocketing' with demand jumping 33 per cent, according to the report. The cybersecurity workforce gap grew by 19.1 per cent from 2023 to 2024, said the report, citing data from ISC2, a cybersecurity professional association.
