Thailand Prepares Stimulus to Counter US Tariffs
The Thai Finance Ministry is actively preparing a comprehensive set of stimulus measures aimed at offsetting the potential negative economic impacts of new US tariffs. According to Pornchai Thiravecha, director-general of the Fiscal Policy Office, the government is ready to implement various strategies to stimulate domestic spending and investment should a slowdown in exports affect economic growth. These measures include accelerating the disbursement of public investment budgets for major infrastructure projects to create jobs and economic activity across the country. Additionally, the government is considering introducing tax policies designed to encourage consumption, such as deduction programs for domestic tourism and shopping, and providing direct support to the vital tourism and service sectors. These plans are being developed with a careful consideration of fiscal discipline and long-term economic stability, ensuring a balanced and sustainable response to the external trade challenges.
Supporting Businesses and Farmers Through Strategic Funds
In a proactive effort to bolster the resilience of its business sector, the government is also preparing a series of tax measures to reduce operational costs and enhance liquidity for companies. These include expediting value-added tax refunds for exporters and extending payment deadlines for taxes and social security. To help businesses adapt and become more competitive, tax incentives are being considered for companies that invest in projects to improve production efficiency or pivot their product lines. The government’s 10 billion baht Competitiveness Enhancement Fund will also play a key role, providing financial grants and co-investment opportunities for factories to upgrade their machinery and adopt new technologies. For the agricultural sector, particularly for corn and soybean growers who may be impacted by increased US imports, the government is considering providing temporary income compensation or offering production inputs at reduced costs during an initial adjustment period.
Modernizing Laws for Enhanced Global Competitiveness
Beyond immediate financial measures, the Thai government is undertaking a significant effort to revise and modernize its legal and regulatory framework to comply with international trade agreements and improve national competitiveness. In the short term, this includes urgently amending laws such as the Customs Act and the Customs Tariff Act to restructure import tariffs on US goods. The government will also review and revise various sanitary and food safety regulations that have traditionally acted as non-tariff barriers, ensuring they align with international standards without compromising consumer safety. Looking to the future, the government plans a broader structural reform to create a more business-friendly environment. This will involve streamlining bureaucratic procedures, modernizing labor and investment laws, and expanding digital government services. Over the medium term, key legal reviews will target outdated laws and anti-monopoly legislation to foster a fairer market and encourage new players, particularly small and medium-sized enterprises (SMEs) and startups.
