Thailand Scraps Digital Wallet Scheme, Redirects 150 Billion Baht into Targeted Economic Lifeline

Economic

Summary:

Amid intensifying global trade tensions and U.S. tariff hikes, Thailand has abandoned its controversial 10,000-baht digital wallet plan in favor of a more flexible 150-billion-baht stimulus package focused on tourism...

Thailand Abandons Flagship Digital Wallet Initiative in Favor of Targeted Stimulus

In response to rising global economic uncertainty and the cascading effects of U.S.-led trade tariffs, the Thai government has announced a major shift in its economic strategy. The widely publicized 10,000-baht digital wallet initiative—once hailed as a hallmark policy of the ruling Pheu Thai party—has been scrapped. Instead, 157 billion baht from emergency reserves and central contingency funds will be reallocated to a new, targeted economic stimulus package.

Deputy Prime Minister and Finance Minister Pichai Chunhavajira confirmed that the decision reflects evolving macroeconomic conditions, including the economic impact of trade protectionism and global manufacturing disruptions. The revised strategy will be presented at the May 19 meeting of Thailand’s Economic Stimulus Policy Committee, chaired by Prime Minister Paetongtarn Shinawatra.

A Strategic Pivot to Economic Sectors at Risk

The new stimulus plan will emphasize two key sectors: tourism and real estate—both viewed as vulnerable to a downturn in international demand and capital flows. As U.S. tariff measures begin to reshape supply chains and trade competitiveness, Thai exports and domestic production are expected to come under pressure from both weakening foreign demand and increased inflows of cheap imports.

In light of these risks, the Thai government aims to reallocate stimulus funding toward initiatives that will support liquidity, incentivize industrial restructuring, and sustain business operations throughout the supply chain. Key measures are expected to include fiscal incentives, liquidity support mechanisms, and targeted investment programs.

Digital Wallet Project Phased Out After Limited Implementation

The digital wallet scheme was originally designed to distribute 10,000 baht (approx. USD 300) to all Thai citizens aged 16 and above—estimated at 50 million people—via a blockchain-based application, limited to use within their registered locality. It was intended to stimulate local economies and digital financial inclusion.

While the first two phases of the program were implemented through cash disbursements to 19.55 million elderly and vulnerable citizens, the third phase—targeted at younger adults using digital currency—never materialized. The plan’s collapse marks a setback for Pheu Thai’s populist agenda but reflects a pragmatic shift in fiscal prioritization.

Global Headwinds Drive Economic Realignment

Thailand’s decision comes as trade friction between the U.S. and China reignites, dragging smaller economies like Thailand into the ripple effects. Tariff increases are expected to dampen export revenue, undermine manufacturing competitiveness, and put additional strain on the baht.

Officials cited economic forecasts for the second half of 2025 as a key concern, with global instability expected to intensify. The government remains committed to achieving GDP growth above 3% in 2025, but officials acknowledge that policy tools must now be repurposed to shield Thailand from external shocks and ensure longer-term stability.

From Populist Stimulus to Structural Intervention

Thailand’s pivot from a universal digital wallet giveaway to a targeted industrial stimulus reflects a broader recalibration of fiscal policy under economic duress. Faced with inflationary risks, global trade fragmentation, and weakening external demand, Bangkok is moving toward a more surgical approach to economic recovery—channeling resources to sectors most exposed to global disruption.

This move underscores a key lesson in contemporary economic governance: in times of global turbulence, resilience often requires prioritization over populism, and flexibility over political symbolism.

Source: Nation Thailand

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Economic

China–U.S. Trade War

China Retaliates with Sharp Anti-Dumping Tariffs on Key Technical Plastic

On May 16, China’s Ministry of Commerce finalized a sweeping anti-dumping ruling, imposing punitive tariffs on imports of polyoxymethylene (POM) copolymer—an engineering plastic used as a metal substitute in industries such as automotive, electronics, and medical devices. The tariffs, reaching up to 74.9%, target suppliers from the U.S., the European Union, Japan, and Taiwan, following a one-year investigation initiated in May 2024.

The timing of the announcement is particularly notable. It comes directly on the heels of Washington’s recent tariff hike on Chinese electric vehicles, batteries, and semiconductors—a signal that Beijing is prepared to respond in kind through trade remedies under WTO-allowed frameworks.

Material of Strategic Importance at the Center of Dispute

POM copolymer is widely used for its strength and durability in applications that once relied on metals like copper and zinc. It plays a critical role in high-value manufacturing and is tightly interwoven with global value chains. This makes it a strategic item—not just commercially, but geopolitically.

The Ministry’s final determination affirmed that exporters from the targeted regions engaged in dumping practices that harmed Chinese domestic producers. As a result, different importers are now subject to sharply differentiated duties:

United States: Up to 74.9%, the highest among all regions

European Union: A uniform 34.5%

Japan: General rate of 35.5%, with Asahi Kasei Corp receiving a lower rate of 24.5%

Taiwan: General rate of 32.6%, but Formosa Plastics and Polyplastics Taiwan face reduced tariffs of 4% and 3.8% respectively

Tariff War Truce at Risk Despite Temporary Relief

Earlier this week, Beijing and Washington agreed to a temporary reduction of retaliatory tariffs over a 90-day period. While the move was perceived as a tentative de-escalation, China's imposition of steep anti-dumping duties sends a conflicting message. It highlights that even amid détente, both sides are continuing to hedge against each other’s trade measures through legal retaliatory channels.

Commentary in China’s state-owned Global Times called for extending the current “truce,” but analysts view Beijing’s latest action as an effort to secure leverage or signal dissatisfaction with the limited scope of U.S. concessions.

Structural Frictions Extend Beyond Tariffs

The timing of the anti-dumping decision also coincided with the Asia-Pacific Economic Cooperation (APEC) forum meeting in South Korea, where participants issued a warning about the fragility of the global trade system. The continued exchange of trade actions between the world’s two largest economies threatens to deepen fragmentation and disrupt global supply chains.

China’s targeted use of anti-dumping laws—especially in materials with broad industrial use like POM—may indicate a strategic pivot: countering U.S. tariffs not with broad-based retaliation, but with precise, WTO-compliant economic pressure designed to disrupt sensitive supply inputs.

Tensions Resurface Despite Temporary Trade Pause

While recent dialogue between the U.S. and China hinted at a willingness to defuse tariff escalation, Beijing’s imposition of anti-dumping tariffs on a key industrial material illustrates how fragile and conditional the current truce remains. The high tariffs—especially those aimed at U.S. suppliers—highlight the enduring structural conflict over trade practices, supply chain control, and industrial dominance.

With global trade forums sounding the alarm over increasing systemic risks, both sides now face a choice: build on short-term compromises to stabilize economic ties or escalate through calculated, legalistic trade retaliation. The outcome of this balancing act will be critical for global market stability in the months ahead.

Source: Reuters

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China–U.S. Trade War

South Korea: From Export Surplus to Strategic Production Partnership

Among America’s largest trading partners, South Korea stands out not only for its export volume but also for its ability to realign its trade posture under pressure. Confronted with concerns from Washington over trade imbalances, Seoul has transformed potential friction into deeper cooperation by directly investing in the U.S. economy.

Flagship investments from conglomerates such as Samsung, Hyundai, and LG serve not merely to circumvent tariffs but to establish a physical and strategic presence in key U.S. industries. Samsung’s $17 billion semiconductor plant in Texas, for example, is not only creating jobs but also strengthening domestic chip supply—a sector now viewed by U.S. policymakers as a pillar of national security.

Similarly, Hyundai and LG’s electric vehicle and battery production facilities in Georgia align with U.S. industrial and environmental policy goals, especially under the Inflation Reduction Act. By embedding themselves in the American value chain, Korean firms are demonstrating regulatory compliance and long-term economic contribution, softening U.S. concerns over trade surpluses.

In 2023, South Korea exported $115.3 billion worth of goods to the U.S.—a record high. Yet, rather than being targeted by trade retaliation, Korea’s status as a trusted and embedded partner shields it from criticism, largely because it shares benefits via job creation and supply chain reinforcement.

Mexico: From Assembly Hub to Integrated Industrial Partner

Mexico’s emergence as the U.S.’s largest trading partner in 2023, surpassing China, reflects more than geographic proximity. It underscores Mexico’s policy transformation into a high-value industrial collaborator within North America. With exports to the U.S. reaching $490.2 billion, Mexico has shifted from being a low-cost supplier to a strategic production partner.

This evolution is grounded in infrastructure reform, targeted investment incentives, and the effective use of the USMCA framework. Major U.S. and international firms—such as Tesla, BMW, Foxconn, and Intel—have expanded operations in border states like Nuevo León and Chihuahua, drawn by a supportive policy environment and integrated logistics systems.

Mexico's upgraded export structure now includes mid- and high-tech goods such as EV components, medical devices, and semiconductors. Its trade surplus with the U.S. reached $167 billion in 2023, but this surplus has not strained relations due to its embedded role in shared production networks and regulatory alignment on labor and environmental standards.

According to the Brookings Institution, Mexico’s role has evolved from passive assembly-line support to active industrial co-ownership within the North American framework—a shift that helps insulate it from future tariff threats and cements its place in reconfigured global supply chains.

Germany: Preserving Surplus through Industrial Strength and Onshore Investment

Germany, long a subject of U.S. criticism for its persistent trade surpluses, has managed to maintain its position by leveraging quality manufacturing and strategic onshore investment. Rather than confronting U.S. protectionism head-on, Germany has opted to embed its industry into the American economic landscape.

BMW’s Spartanburg plant in South Carolina exemplifies this approach. With a production capacity of over 410,000 vehicles annually—many of which are exported globally—the facility positions the U.S. as a critical node in BMW’s supply chain. This not only offsets policy risk but also reinforces Germany’s industrial identity in U.S. eyes.

Other firms such as Siemens, BASF, and Bosch have followed suit, expanding in sectors like automation, clean energy, and specialized chemicals—industries that align with U.S. economic priorities. By contributing directly to U.S. manufacturing, German companies create shared value rather than extractive trade dynamics.

At the same time, Germany continues to export high-demand, high-tech goods to the U.S., including precision machinery, pharmaceuticals, and green technologies. In 2023, Germany’s trade surplus with the U.S. stood at approximately $75 billion, yet tensions remain subdued due to its reciprocal economic footprint.

Professor Gabriel Felbermayr of the Kiel Institute summarizes Germany’s approach as one of strategic co-investment. Rather than reducing exports, Germany builds long-term presence in partner markets, transforming surplus trade into shared interest through durable economic integration.

Trade Surpluses Reframed through Strategic Engagement

The experiences of South Korea, Mexico, and Germany demonstrate that sustaining a strong trade relationship with the U.S. amid rising protectionism does not require surrendering export ambitions. Instead, these countries have pursued alternative strategies—through investment, compliance, and industrial integration—that reinforce economic ties without undermining their own growth.

By embedding production, upholding regulatory alignment, and co-owning value chains, these nations have redefined surplus not as a threat, but as a platform for mutual benefit. In a global landscape increasingly shaped by tariffs and supply chain nationalism, such adaptive strategies may serve as a model for navigating economic realignment without sacrificing competitiveness.

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Economic

ECB Approaches Policy Crossroads Amid Diminishing Room to Cut Rates

After initiating a monetary easing cycle in July 2024, the European Central Bank (ECB) has reduced interest rates seven times, bringing the deposit rate down to 2%. As markets anticipate another cut in June, internal disagreements within the ECB are surfacing over whether further reductions are warranted or if it is time to pause and reassess.

Speaking to CNBC, Latvia's central bank governor Martins Kazaks acknowledged that the ECB may be nearing the bottom of its current easing trajectory. While inflation is aligning with the 2% target under the ECB’s base scenario, he warned that external uncertainties—particularly from global trade—could rapidly alter the policy landscape. Although Kazaks left the door open for one or two more cuts, he emphasized a need to monitor the trajectory of global trade negotiations closely before proceeding.

Diverging Views on Inflation and External Risks

French central bank governor Francois Villeroy de Galhau expressed a more dovish stance in an interview with French outlet EBRA. He believes Europe remains insulated from the inflationary effects of U.S. trade protectionism and foresees room for one more rate cut over the summer. According to Villeroy, Trump’s tariff-driven inflation in the U.S. is unlikely to spill over into the eurozone, thus justifying additional monetary support.

In contrast, ECB Executive Board member Isabel Schnabel offered a more cautious—and arguably hawkish—view. Speaking at Stanford University, Schnabel argued that rates are already sufficiently accommodative and that the central bank should maintain its current stance to retain policy flexibility. She warned that while near-term inflation may fall below target due to low energy costs, a strong euro, and subdued demand, medium-term inflation risks are tilted to the upside due to fiscal expansion and global supply disruptions.

Tariffs and Fragmented Supply Chains Complicate Outlook

Schnabel highlighted two key sources of inflationary risk. First is the expected rise in government spending across the eurozone, particularly in Germany where new commitments to defense and infrastructure are expanding the fiscal footprint. Second is the growing threat of trade fragmentation—a byproduct of tariff wars led by the U.S.—which could raise production costs and stoke inflation by disrupting global supply chains.

She also challenged the notion that U.S. tariffs would result in eurozone deflation if the EU refrains from retaliating. Even without direct countermeasures, higher global production costs could be transmitted through international supply networks, neutralizing any deflationary impact of weaker global demand and potentially lifting eurozone inflation.

Markets Price In One More Cut After June

Despite the ongoing debate, market expectations remain anchored around a June rate cut. Futures pricing currently implies a 90% probability that the ECB will lower the deposit rate on June 5, with the rate potentially bottoming at 1.75% before year-end. However, expectations for further easing beyond this point remain subdued, suggesting that investors are preparing for a cautious, data-dependent ECB in the second half of 2025.

The ECB now stands at a critical juncture. While some policymakers argue for continued easing to support demand and reinforce the inflation target, others caution that long-term risks—especially those tied to fiscal stimulus and global trade fragmentation—may soon outweigh the benefits of lower rates.

This divergence reflects the broader challenge facing modern central banks: balancing short-term disinflationary trends with structurally emerging inflation risks in a world of geopolitical shocks, protectionism, and post-pandemic policy shifts. For the ECB, preserving policy flexibility may be the most prudent course—especially as Europe braces for a potentially turbulent global economic phase in 2025.

Source: Euronews

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Commodity

Nearly 90,000 Tons of Strategic Food Reserves Headed to Market

Vietnam's General Department of State Reserves (Cục Dự trữ Nhà nước) has officially initiated the release of a significant volume of national food reserves, totaling close to 90,000 tons. According to Official Letter No. 419/DTNN-TCQLH issued by the department, this release stems from the 2024 rotational sales plan that has not yet been completed and will now be carried over into 2025.

Specifically, the department has authorized its regional branches to organize the auction of 40,000 tons of paddy (harvested and stored in 2022) and over 49,519 tons of rice (stored in 2023). The sales will be conducted through a competitive public auction process, in accordance with the Law on Property Auctions and relevant amendments.

Auction-Based Sale with Pricing Governed by State Guidelines

The sales will be carried out by regional Reserve Units under the standardized procedures set out by Vietnam’s Ministry of Finance and the amended Property Auction Law. All transactions will be executed transparently through public bidding to ensure market fairness and alignment with national fiscal policy.

Regarding price setting, the regional Reserve Units must apply the comparative pricing method specified in Section 3, Chapter II of Circular No. 45/2024/TT-BTC. This circular outlines Vietnam’s general valuation framework for goods and services priced by the state. The starting prices determined from these evaluations must be submitted for final approval by the Director of the General Department of State Reserves.

Compliance Timeline and Documentation Requirements

To ensure procedural rigor and coordination, the General Department has mandated that all regional offices finalize and submit the complete dossiers—detailing the proposed starting prices and valuation justifications—no later than May 26, 2025. These documents must comply with the guidelines laid out in Circular No. 25/2025/TT-BTC and amendments to Circular No. 89/2015/TT-BTC governing national reserve goods management.

The rotational sale mechanism is designed to maintain the freshness and quality of national reserves while also contributing to market stability. The sale not only ensures effective stock turnover but can also serve as a policy tool to stabilize food prices in times of volatility or surplus.

This move reinforces the dual role of the State Reserve system: safeguarding national food security and serving as an economic buffer during disruptions. It also demonstrates institutional transparency and a commitment to market-based mechanisms in the management of public resources.

The auction of nearly 90,000 tons of state-held rice and paddy signals Vietnam’s continued efforts to optimize its reserve management system. By extending the 2024 rotational plan into 2025, the government is both preserving the functional quality of its food reserves and enhancing economic efficiency. Through structured public auctions and regulated pricing, the State Reserve system is fulfilling its mandate to balance market needs with national security objectives.

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ASEAN Resurrects Monetary Fund Ambition in Response to Global Shifts

Southeast Asian nations are reinvigorating plans to establish their own regional monetary fund, signaling a significant evolution in ASEAN’s financial strategy. The proposal, long discussed in economic forums but yet to be fully implemented, is now gaining momentum as regional leaders seek greater autonomy in monetary cooperation and trade settlement.

Speaking to international media outlet TV BRICS during a visit to Kazan, Russia on May 17, Malaysian Prime Minister Datuk Seri Anwar Ibrahim revealed that ASEAN member states are actively discussing mechanisms to launch a monetary fund modeled in part on the Chiang Mai Initiative—a multilateral currency swap agreement formed in response to the 1997 Asian financial crisis.

Local Currency Integration Gains Traction

Anwar cited ongoing efforts among the central banks of Thailand, Indonesia, and China to conduct up to 20% of their trade using local currencies. This figure, amounting to several billion dollars, reflects a broader push toward financial de-dollarization in the region. While the U.S. dollar remains dominant in global finance, ASEAN leaders are increasingly exploring practical steps to hedge against currency volatility and external financial shocks.

The initiative is part of a growing movement across emerging economies to reduce dependency on the dollar for trade and reserves—a trend accelerated by geopolitical instability, interest rate uncertainty, and the fragmentation of global financial systems.

Malaysia to Host Economic-Focused ASEAN Summit

Malaysia will host the upcoming ASEAN Summit on May 26–27, where economic resilience and financial innovation will dominate the agenda. According to Prime Minister Anwar, this summit presents a strategic opportunity to formalize steps toward a regional financial mechanism and to reaffirm ASEAN’s commitment to multilateral, rule-based cooperation.

The summit is expected to attract key ASEAN trading partners, creating momentum for agreements that could lay the groundwork for a future ASEAN Monetary Fund (AMF). This proposed institution would potentially operate alongside existing frameworks like the Chiang Mai Initiative and the Asian Development Bank, offering member states emergency liquidity support, technical assistance, and coordination for macroeconomic stability.

Reducing Risk and Enhancing Regional Sovereignty

The potential AMF reflects a desire not just for financial independence, but also for strategic economic insulation in an increasingly volatile global environment. It would allow member nations to respond more effectively to capital outflows, external debt crises, or trade disruptions—particularly in a region that is deeply integrated into global supply chains.

Beyond risk mitigation, such a fund could facilitate investment in ASEAN-led infrastructure, green finance, and digital transformation initiatives, reinforcing the bloc’s position as a cohesive economic entity in the Indo-Pacific.

A Regional Response to a Multipolar Financial Future

ASEAN’s revived plan to establish a regional monetary fund represents a decisive move toward financial self-determination. While the U.S. dollar is likely to remain central to global markets in the near term, Southeast Asia’s pursuit of local currency integration and collective financial instruments suggests a long-term shift toward a more multipolar monetary order.

If successful, the initiative could provide ASEAN with greater control over its economic destiny, reduce exposure to global shocks, and position the region as a model for cooperative financial governance in the Global South.

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China–U.S. Trade War

Economic

Washington Shifts from Diplomacy to Direct Tariff Enforcement

On May 16, President Donald Trump confirmed a strategic pivot in U.S. trade policy: rather than continuing bilateral negotiations with over 150 countries, his administration will issue formal notices outlining new tariff rates within 2–3 weeks. This decision effectively ends efforts to secure comprehensive trade deals before July and signals a turn toward aggressive, unilateral action designed to accelerate trade realignment.

The shift stems from logistical reality. Trump acknowledged at a business roundtable in the United Arab Emirates that negotiating simultaneously with dozens of countries is infeasible. The unilateral notification method, he argued, allows Washington to move swiftly while pressuring trading partners into compliance with U.S. demands—framing it as a question of administrative efficiency and strategic leverage.

From Negotiation to Imposition: A New Phase in U.S. Trade Strategy

The policy marks a hardening of Trump’s tariff doctrine, originally unveiled in April, which proposed a sweeping 50% duty on imports from around 60 countries and a baseline 10% tariff on all other foreign goods. While the plan was temporarily suspended for 90 days in response to market backlash, Trump is now prepared to implement it without further dialogue—excluding only China, with which the U.S. reached a provisional agreement.

This new approach represents a break from diplomatic multilateralism and signals a return to Trump’s “America First” economic agenda. By circumventing direct negotiations, the administration is prioritizing short-term control over longer-term consensus-building.

Global Markets and Allies Brace for Repercussions

Trump’s announcement has rattled major U.S. trade partners such as the European Union, Japan, and South Korea. These nations now face the risk of being subjected to blanket tariffs without recourse to tailored negotiations. Even countries that maintain trade surpluses with the U.S. could find themselves penalized, as the tariff system appears designed to apply uniformly rather than in proportion to trade imbalances.

The only exception so far—Britain—secured a preferential framework involving only the 10% baseline rate and specific sectoral tariffs. This has led to skepticism among other allies about whether similar deals are still achievable, or if the U.S. is moving toward a transactional, winner-takes-all model.

Economic Risks of Escalating Trade Wars

Economists are warning that unilateral tariffs could drive up prices of imported goods, increase production costs, and ultimately hurt American consumers and manufacturers. The chain reaction of retaliatory tariffs would also threaten global supply chains and dampen business confidence.

While Trump's administration defends the policy as necessary to reduce the U.S. trade deficit and protect domestic industries, many experts argue it could backfire. A prolonged period of tariff uncertainty could slow global growth, undermine financial markets, and strain diplomatic ties with key allies.

Short-Lived Calm with China, Prolonged Tension Elsewhere

Although recent U.S.–China negotiations yielded a temporary tax reduction agreement, the 90-day window to reach a broader settlement is rapidly closing. Talks with other strategic partners in Asia, including Japan and South Korea, have slowed, further weakening the prospects of near-term multilateral resolutions.

Trump’s strategy now appears less about forming new economic alliances and more about enforcing compliance through trade pressure. This tactic may resonate with domestic political supporters but raises concerns over rising geopolitical friction and the erosion of trust in international trade norms.

Unilateralism Risks Diplomatic and Economic Fallout

The Trump administration’s decision to impose tariffs without negotiation underscores a significant escalation in global trade tensions. While intended to secure U.S. economic interests and leverage, the approach risks triggering retaliatory measures, damaging strategic alliances, and injecting instability into already fragile financial markets.

With trade diplomacy replaced by direct enforcement, the U.S. may soon find itself navigating a more fragmented, reactive global economy—one where economic influence comes at the cost of cooperation, and strategic gains may be undermined by unintended consequences.

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