Thailand Responds to US Tariffs with $1.2 Billion Support Package

Economic

Summary:

Thailand is mobilizing over 40 billion baht ($1.22 billion) in relief measures to counteract the economic effects of new U.S. tariffs, as officials urge the central bank to adopt a more accommodative monetary stance....

Government Prepares Fiscal Countermeasures Against Tariff Shock

In response to the United States' decision to impose 36% tariffs on Thai exports, the Thai government is formulating a stimulus package exceeding 40 billion baht (approximately $1.22 billion). Deputy Finance Minister Paopoom Rojanasakul announced the plan on Wednesday, describing it as a preemptive measure to cushion the anticipated drag on trade, investment, and employment in key export sectors.

The scale of the tariffs is significant and is expected to disrupt the competitiveness of Thai goods in one of its largest export markets. This has triggered immediate concerns about export contraction, potential layoffs, and broader economic slowdown. The announced fiscal intervention aims to provide targeted support to affected businesses and supply chains, likely through subsidies, credit support, and investment incentives.

Call for Monetary Policy Easing Reflects Broader Economic Concerns

Alongside fiscal measures, the deputy finance minister also called on the Bank of Thailand to further loosen its monetary policy. This recommendation suggests that existing interest rates may be insufficient to stimulate domestic demand or offset the looming shock to export earnings. The combination of tariff pressure and an already fragile global trade environment could exacerbate Thailand’s growth challenges if monetary support remains constrained.

This proposed coordination between fiscal and monetary policy reflects the government’s recognition of the risk that trade policy changes abroad can rapidly transmit into domestic vulnerabilities. The 36% tariff rate imposes a steep barrier, and without sufficient counteraction, the country’s export-reliant economy may face weakening GDP growth in the second half of 2025.

Exchange Rate Dynamics Add Complexity to Policy Response

With the Thai baht currently trading at approximately 32.66 per U.S. dollar, exchange rate stability will be a critical variable in mitigating the overall impact. A weaker baht could theoretically enhance export competitiveness, but excessive depreciation might also raise import costs and destabilize inflation expectations. Therefore, the central bank’s potential rate cut will need to balance support for economic growth with inflation management and currency market stability.

Thailand’s rapid preparation of a substantial fiscal relief package highlights the seriousness of the external shock posed by new U.S. tariffs. While the government’s response is proactive, its effectiveness will depend heavily on timely implementation and complementary monetary easing. As trade dynamics shift, sustaining confidence in Thailand’s economic fundamentals will require flexible and decisive macroeconomic management.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Daniel Carter

Economic

Political

Key Points:

● Trump plans letter proposing new tariffs to EU.

● Negotiation terms are integral to updates.

● Potential impact on EU-US trade relations.

The potential tariff plan by Donald Trump could alter trade dynamics between the United States and the European Union, leading to changes in international trade policies.

Trade Negotiations

Donald Trump is set to communicate a possible tariff adjustment with the European Union via a formal letter. The announcement reflects his administration's enduring strategy of revising trade deals to achieve "reciprocity" and "fair trade" with key long-standing partners.

In his statement, Trump highlighted the willingness to negotiate should alternative offers arise that align with US interests. His communication also emphasizes that the August 1 deadline is negotiable if the EU proposes adjustments to their tariffs.

"If they call with a different offer, and if I like it, we'll do it... the Aug. 1 deadline was ‘firm but not 100% firm. If they call up and they say we'd like to do something a different way, we're going to be open to that. But essentially that's the way it is right now." — Donald Trump, President, United States.

Trump to send tariff letter to EU, initiating potential negotiations

Anticipated effects could ripple through markets sensitive to trade disputes, mirroring past reactions seen during US-China tariff exchanges. Investors and businesses are closely watching for any forthcoming economic shifts.

Financially, Trump's approach may exert pressure on sectors reliant on transatlantic trade, creating potential business disruptions. Conversely, it could open avenues for new negotiations and trade terms beneficial to certain industries.

Historical patterns suggest a push towards defensive asset allocation, including investments in cryptocurrencies like BTC and ETH, during heightened macroeconomic uncertainty. The absence of official crypto market impacts remains, yet analogous events hint at possible volatility.

Source: CryptoSlate

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Weak Consumer Spending Signals Prolonged Deflation

China’s economic recovery remains fragile, marked by persistently weak domestic demand and deepening deflationary trends. In June, China’s Producer Price Index (PPI) declined by 3.6% year-on-year, the steepest drop since July 2023. This surpasses market expectations and signals ongoing price cuts across supply chains, which in turn reflect dwindling consumption and declining pricing power among producers. The decline has been uninterrupted since September 2022, forming a clear pattern of deflation that has yet to be reversed.

Although the Consumer Price Index (CPI) rose slightly by 0.1% in June compared to the same period last year breaking a four-month streak of declines this minor increase suggests only a tentative stabilization. In fact, core CPI, which excludes volatile items like food and energy, rose by 0.7%, the most substantial gain in over a year. This divergence implies that while some underlying inflation exists, it remains insufficient to counteract broader disinflationary forces affecting overall consumption.

The relationship between these indices reveals a troubling scenario: while some sectors might see marginal price recovery, the overall economy is entrenched in stagnation, with producer prices dragging down profitability and investment incentives. This imbalance between stagnant consumer inflation and accelerating producer deflation exposes vulnerabilities in supply-side resilience and domestic consumption dynamics.

Industrial Sector Suffers as Profitability Collapses

Industrial profitability continues to decline sharply, reinforcing the economic malaise. In May, profits for industrial companies fell 9.1% compared to the previous year, the worst performance since October 2024. This sharp contraction coincides with aggressive price competition among domestic firms, as businesses attempt to stimulate demand through excessive discounting. However, this strategy appears ineffective in altering consumer behavior and instead erodes profit margins and financial stability.

During a high-level policy meeting chaired by President Xi Jinping, Chinese leadership criticized the destructive price wars among local companies. They emphasized the need to pivot toward product quality enhancement rather than relying on unsustainable discounting. The leadership also reiterated the importance of phasing out outdated industrial capacity, which continues to burden the economy and inhibit productivity growth.

This policy stance reflects an attempt to shift structural behavior within the corporate sector, recognizing that short-term tactics such as price reductions do not address the root causes of weak demand. The correlation between lower corporate earnings and excessive discounting indicates a deteriorating business environment, which may further suppress investment and employment if unaddressed.

Export Optimism Delays Stimulus Measures

Despite the intensifying domestic slowdown, Chinese authorities have so far refrained from launching a broad-scale consumption stimulus. According to Larry Hu, Chief China Economist at Macquarie, the government’s optimism about rising exports in recent months has led to a deprioritization of domestic demand-boosting measures. He suggests that policymakers may not act decisively until export performance sharply deteriorates.

This policy inertia reflects a cautious macroeconomic strategy that relies on external trade resilience to buy time. However, with geopolitical tensions rising particularly with the United States and the European Union the sustainability of this external demand cushion is increasingly uncertain. Should these frictions escalate, Chinese exporters may face additional barriers, weakening one of the last sources of growth momentum.

Policy Constraints and Structural Challenges

The economic trajectory suggests that without timely and large-scale policy intervention, China risks becoming trapped in a persistent deflationary cycle. The reluctance to implement aggressive stimulus while awaiting clearer export data could further entrench low consumer confidence and delay recovery. Structural issues, such as overcapacity and weak private sector sentiment, are also limiting the efficacy of conventional policy tools.

Furthermore, Beijing’s stated goal of enhancing product quality and eliminating outdated production assets points to a long-term vision. However, the near-term economic risks ranging from shrinking profits to fragile household spending require more immediate and targeted actions to stabilize momentum.

China's current economic landscape is shaped by subdued consumption, falling factory gate prices, and eroding industrial profits. While some indicators such as core CPI offer mild optimism, the broader trend reflects ongoing economic distress. The government's hesitance to deploy fiscal or monetary support, amid cautious optimism about exports, may inadvertently worsen the situation if external demand falters. For recovery to gain traction, a shift from reactive to proactive policy intervention may become essential in the months ahead.

Source: CNBC

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

China–U.S. Trade War

Reasserting Aggression in Trade Policy

On July 8, President Donald Trump publicly emphasized that there would be no further extensions for upcoming tariffs scheduled for August 1. His remarks, delivered across both social media and a Cabinet meeting, marked a shift from the previous day’s tone, when he had suggested a possible delay in implementation. Markets initially appeared indifferent, but the sharp escalation in rhetoric and policy intent the following day signaled to investors that the U.S. administration was determined to proceed with its protectionist agenda.

The President's decision to eliminate country-specific extensions marks a strategic escalation in trade policy. This directive specifically affects at least seven nations whose trade relations with the U.S. are under review, with updates promised by Wednesday morning in Washington. The afternoon is expected to bring further announcements, indicating a phased rollout of more aggressive tariff enforcement.

Fluctuating Market Reactions Reflect Rising Uncertainty

Financial markets responded to the shift with heightened volatility. The S&P 500 index saw unstable movement as investors digested the implications of renewed trade pressures. Meanwhile, U.S. long-term bond yields declined, reflecting a broader global trend as investors sought safer assets in response to deepening trade uncertainty. This suggests a relationship between policy statements and investor behavior, where increased risk from political developments leads to more conservative market positions.

Targeting the European Union and BRICS Members

Despite acknowledging progress in trade talks with the European Union, President Trump expressed dissatisfaction over the EU’s continued tariffs and regulatory actions against major American tech companies. He signaled that new duties on EU imports could be announced within two days, underscoring a retaliatory logic aimed at counterbalancing perceived unfair treatment of U.S. firms.

Simultaneously, India, a recent focus of trade negotiations, was abruptly warned of an additional 10% tariff. Although Trump had earlier claimed a near-final agreement with New Delhi, he cited India’s BRICS affiliation as justification for punitive measures. This shift reveals a policy environment where diplomatic progress may be overshadowed by geopolitical alliances, leading to sudden reversals in trade strategy.

Geopolitical Dimensions Overshadow Economic Negotiations

These developments reflect a broader strategic approach where tariff threats serve as both economic instruments and geopolitical signals. Trump’s mention of BRICS suggests that trade policy is being influenced not solely by bilateral economic metrics but also by multilateral political groupings. This introduces a correlation between political alignment and economic consequence, with BRICS membership potentially interpreted as a challenge to U.S. global positioning.

The aggressive posture adopted by President Trump adds another layer of complexity to an already fragile global trade landscape. While some negotiations may continue behind the scenes, the public signaling of imminent tariffs and the dismissal of previous flexibility increase the perceived instability. For markets and trading partners alike, the unpredictability embedded in U.S. trade policy is likely to constrain long-term planning and investment until clearer patterns emerge.

Source: Yahoo Finance

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

FastBull Featured

Daily News

[Quick Facts]

1. Trump threatens additional sanctions against Russia, expresses strong dissatisfaction with Putin.

2. Trump threatens significant tariffs on copper and pharmaceuticals, U.S. copper prices surge over 10%.

3. Houthis: Maritime attacks target only Israel and related

4. Trump: "Reciprocal Tariffs" to take effect August 1st.

5. Trump escalates global trade war: 50% tariff on Copper, Semiconductors and Pharmaceuticals next.

6. NY Fed Survey: Consumer inflation expectations fall to Pre-Tariff levels.

[News Details]

Trump threatens additional sanctions against Russia, expresses strong dissatisfaction with Putin

On July 8th, U.S. President Trump announced he had approved additional shipments of defensive weapons to Ukraine and was considering further sanctions against Russia, while expressing that he was "not happy " with Russian President Putin. Speaking at a White House cabinet meeting that day, Trump stated that Putin had made many statements and maintained an "extremely positive" attitude, but the outcomes had "meant nothing." Trump indicated he is weighing whether to support a new bill advancing in the Senate that would impose severe sanctions on Russia. Earlier on the 1st, the White House and Pentagon confirmed the U.S. had suspended partial military aid to Ukraine. Responding to reporters’ questions during the cabinet meeting on the 8th, Trump claimed he was unaware who ordered the aid suspension. With his approval, the U.S. is now sending "some more defensive weapons" to Ukraine.

Trump threatens significant tariffs on copper and pharmaceuticals, U.S. copper prices surge over 10%

During the cabinet meeting on the 8th local time, President Trump announced some major actions in the pharmaceutical field "Very soon". Trump stated: "We're going to give people about a year, year and a half, to come in, and after that, they're going to be tariffed," He added, " If they have to bring the pharmaceuticals into the country, the drugs and other things into the country, they’re going to be tariffed at a very, very high rate, like 200 percent." Additionally, after Trump indicated he was considering imposing a 50% surcharge on copper imports to the U.S., domestic copper prices surged over 10%, breaking historical highs in the New York market.

Houthis: Maritime attacks target only Israel and related ships

Senior Houthi leader Mahdi stated on the evening of July 8th that the group's maritime attacks exclusively target Israel and objectives linked to or supporting Israel, emphasizing that unrelated vessels will not be attacked. A day earlier, Houthi military spokesperson Yahya Sarea declared that the group had used two drone boats, five missiles, and three drones to strike the vessel MV Magic Seas for violating the Houthi navigation ban with the route to Israel, successfully hitting the target.

Trump: "Reciprocal Tariffs" to take effect August 1st

On July 8th, U.S. President Trump announced on his social media platform "Truth Social" that reciprocal tariffs would be imposed starting August 1st, 2025, citing letters sent to countries on July 7th and forthcoming correspondence. He stressed that the date remains unchanged and will not be altered. Trump initially unveiled the so-called "reciprocal tariffs" on April 2nd, triggering a market plunge. Under pressure, he deferred steep tariffs for 90 days on April 9 while maintaining a 10% "baseline tariff." On July 7th, he signed an executive order extending the deferral period, postponing implementation from July 9th to August 1st.

Trump escalates global trade war: 50% tariff on Copper, Semiconductors and Pharmaceuticals next

On July 9th, U.S. President Trump announced a 50% tariff on imported copper, intensifying the global trade war, and warned of upcoming tariffs on semiconductors and pharmaceuticals. He noted progress in trade talks with the EU and China but hinted at clarifying tariff expectations for EU exports within two days. Trump also revealed plans for pharmaceutical tariffs as high as 200%, allowing drugmakers at least a year to relocate supply chains to the U.S. The COMEX September copper contract surged 13% on Tuesday to a record close, with intraday gains exceeding 17%, the largest since 1988. Global copper markets reacted strongly, with accelerated shipments to the U.S. depleting LME inventories to near one-day global supply levels last month. Analysts warned the tariffs could inflate raw material costs and reshape global supply chains.

NY Fed Survey: Consumer inflation expectations fall to Pre-Tariff levels

A monthly survey released Tuesday by the New York Federal Reserve showed consumers' future inflation expectations have retreated to early-year levels - before the announcement of steep tariffs. Labor market signals were mixed, with many respondents anticipating difficulty finding new jobs, aligning with data indicating subdued U.S. hiring and layoffs. June's survey revealed median one-year inflation expectations fell for the second consecutive month to 3%. Three- and five-year annualized inflation projections held steady at 3% and 2.6%, respectively. Uncertainty about near-term and medium-term price pressures declined.

[Today's Focus]

UTC+8 10:00 NZ RBNZ July Interest Rate Decision

UTC+8 11:00 NZ RBNZ Governor Orr Holds Monetary Policy Press Conference

UTC+8 18:45 EU ECB Chief Economist Lane Delivers Speech

UTC+8 19:00 EU ECB Vice President de Guindos Delivers Speech

UTC+8 22:00 US May Wholesale Sales MoM

TBD US Reciprocal Tariff Suspension Period Expires

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Political

Russia-Ukraine Conflict

Breaking the Taboo: A VC Fund That Embraces Pure Defense Innovation

European venture capital has traditionally avoided funding defense technology unless the startups offer dual-use applications civilian and military. Estonian firm Darkstar is now breaking this convention by directly funding military-only technologies, especially those battle-tested in Ukraine. With Russia’s invasion entering its fourth year, the urgency to modernize European defense capabilities has shifted investor sentiment, and Darkstar is seizing this moment.

Cofounded by Ragnar Sass, a seasoned tech entrepreneur and investor, Darkstar is not merely making capital commitments. It is embedding itself in Ukraine’s defense ecosystem, building relationships with combat brigades and leveraging that intelligence to help startups design, iterate, and scale products suited for NATO procurement and battlefield realities.

From Hackathons to High-Tech Ammunition: Darkstar’s Evolution

Darkstar has already raised €15 million (of a targeted €25 million) from European entrepreneurs, family offices, and the Estonian state-backed SmartCap. The fund targets pre-seed and seed-stage defense startups with typical check sizes between €500,000 and €1 million. Its first two investments include:

FarSight Vision, which offers geospatial mapping and 3D navigation tools for drone pilots.

Deftak, a firm focused on drone-deployed munitions.

Both companies originated in Ukraine but have since developed operational setups in Estonia to align with European procurement standards. According to Sass, establishing a NATO-compliant presence is essential to win defense contracts, as Western governments require strict adherence to regulatory and operational norms.

A Strategic Shift Sparked by War

Sass, best known for founding Pipedrive and investing in unicorns like Veriff, initially had no interest in the defense sector. His mindset changed following personal involvement in Ukraine’s humanitarian aid and his investment in Krattworks, a drone startup that marked his first foray into military technology. What began as an emotional response evolved into strategic conviction: that Europe needs to rearm using combat-validated technologies.

Darkstar was born from this realization, first operating as a community for defense hackathons and now transforming into a full-scale investment fund with a growing team across Estonia, Germany, and Ukraine.

Bootcamps and Battlefield Validation: A New Investment Model

Darkstar’s edge lies in its operational philosophy. It hosts on-the-ground bootcamps in Kyiv, where selected startups receive real-time feedback from Ukraine’s elite drone and defense units. This process serves as both validation and acceleration, compressing months of testing and iteration into a matter of days.

The connection with military end users gives Darkstar early access to some of Ukraine’s most innovative teams many of whom have survived two years of war with limited resources but significant R&D output. Contrary to assumptions about mobilization blocking tech entrepreneurship, many Ukrainian defense startups are led by women or by founders granted exemptions due to the critical nature of their work.

Not Just Ukrainian: Building a Pan-European Defense Portfolio

Although Ukraine is the fund’s launchpad, Darkstar’s ambitions are continental. It plans to invest in startups from Latvia, Germany, the U.K., and across Central and Eastern Europe. Sass emphasizes the need for companies to relocate or expand beyond Ukraine for regulatory reasons and to scale effectively within NATO frameworks.

The investment categories span autonomous systems, cyber defense, surveillance, electromagnetic warfare, and communications fields critical to the future of both national defense and hybrid conflict zones. While some companies could become acquisition targets for established defense primes, Sass believes others may evolve into independent, venture-scale enterprises.

Challenging Dual-Use Orthodoxy Amid Rising Security Threats

Most European public funds and even NATO’s Innovation Fund still require dual-use functionality, limiting how defense capital is deployed. Yet Estonia’s SmartCap and Lithuania’s Coinvest Capital have quietly removed this restriction. Darkstar’s approach is part of a broader Baltic-led effort to treat defense not as a fringe market but as a critical innovation sector worthy of full-stack venture support.

Sass argues this is a necessary recalibration. "Elite units are more similar to startups than we can imagine," he says, highlighting how battlefield innovation in Ukraine is rapid, decentralized, and mission-driven. But unlike civilian markets, the stakes here are existential.

War Is Driving a New VC Paradigm

Darkstar’s emergence is a symbol of how Russia’s aggression has redefined Europe’s investment ethos. For Sass and his team, this is no longer just about returns it’s about resilience. Backing battlefield-born startups is not only morally compelling for Darkstar’s Estonian founders but strategically vital for a Europe grappling with its defense preparedness.

In rejecting the constraints of dual-use orthodoxy and diving head-first into combat tech, Darkstar signals that the next wave of European defense innovation may not come from traditional primes, but from agile, gritty, war-proven teams building under fire.

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Commodity

Tariff Forecast Revision Signals Escalation in U.S. Trade Policy

Goldman Sachs has revised its baseline expectation for U.S. copper import tariffs from 25% to 50%, citing growing political momentum behind President Donald Trump's intensified trade campaign. The bank’s note on Wednesday underscores how the anticipation of steeper trade barriers is already shaping short-term market behavior, with a likely surge in import activity before the August 1 deadline.

This shift in Goldman’s forecast reflects a reassessment of both political signals and policy trajectory. While the administration had initially floated a 25% copper tariff, Trump has since publicly supported doubling that figure, making the 50% scenario more probable than previously assumed. The causal logic behind this revision rests on policy developments rather than market fundamentals, though the two are now increasingly intertwined.

Front-Loading Expected as Importers Rush to Beat Tariffs

Goldman predicts a further acceleration in copper shipments into the U.S. as companies scramble to avoid higher costs. This “front-running” behavior has historical precedent—similar spikes in import volumes occurred during the 2018–2019 tariff rounds, as buyers moved quickly to stockpile goods ahead of implementation dates.

The expectation of front-loaded imports is based on a simple economic incentive: locking in lower-cost supplies before a sudden 50% price jump. This behavior, however, could lead to temporary market distortions, including shipping bottlenecks, warehouse strain, and uneven price fluctuations in the copper market during July.

Broader Implications for Copper Supply Chains and Inflation Risk

A tariff of this magnitude on a strategic industrial metal like copper—used extensively in housing, electronics, automotive, and energy infrastructure—has downstream implications. Higher import costs could ripple through domestic supply chains, potentially raising prices for finished goods or squeezing margins for U.S. manufacturers who rely on imported raw materials.

If businesses are unable to fully pass on these higher costs, the outcome may be lower investment, reduced output, or margin compression—each with broader economic consequences. Should costs be passed on, consumers may face price hikes in sectors such as electronics and green energy equipment, which are particularly copper-intensive.

While Goldman Sachs did not alter its commodity price outlook in this short note, a prolonged 50% tariff regime could support upward pressure on global copper prices, especially if other nations respond with countermeasures or supply constraints.

Trade Risk Intensifies as Copper Tariff Escalation Looms

Goldman Sachs’ revised 50% tariff baseline marks a significant recalibration of expectations and signals heightened risk for global copper trade flows. The next several weeks are likely to see accelerated imports, strategic inventory adjustments, and increased pricing volatility as U.S. importers react to the elevated tariff threat.

If the 50% duty is implemented as anticipated, its economic impact will extend beyond copper alone—potentially influencing inflation dynamics, industrial competitiveness, and the broader trade environment as tensions deepen.