Archive

Trade Avoidance Easing Shocks

• China’s crashing exports to the US partly reflect avoidance measures, including rerouting through other countries and marking down import prices to subsidiaries.
• Exports to the EU and UK are only trending slightly higher, making little difference to disinflation. ASEAN countries, and especially Vietnam, are seeing trade surge again.
• The US may clamp down on avoidance measures that have eased the shock so far. It could make a painful example of one to encourage concessions from all trade partners.

By Philip Rush

Thailand: 25bp Rate Cut To 1.75% (Consensus 1.75%) in Apr-25

• The Bank of Thailand cut the policy rate by 25bps to 1.75%, in line with market expectations, in response to increasing downside risks from global trade tensions and weaker domestic growth prospects.
• The central bank projects that Thai GDP growth could slow to between 1.3% and 2.0% in 2025, depending on tariff scenarios, while headline inflation falls below the target range, reflecting persistent disinflationary pressures.
• Future rate decisions will depend on global trade developments, domestic credit conditions, and the inflation trajectory, with monetary policy likely to remain accommodative amid heightened external uncertainty.

Trump-ism And East Asia

• Donald Trump’s abandonment of the US-led international order and efforts to reshape global trade and finance do not bode well for East Asian economies that may find themselves forced by Washington into a Chinese sphere of influence as part of a grand bargain with Beijing.

By Alastair Newton

Thailand: 25bp Rate Cut To 2% (Consensus 2.25%) in Feb-25

• Contrary to consensus expectations, the Bank of Thailand cut its policy rate by 25bps to 2.00%, citing weaker-than-anticipated growth and rising downside risks.
• Structural weaknesses in manufacturing and heightened import competition continue to challenge economic momentum, while inflation remains subdued due to supply-side factors.
• Future policy will depend on domestic demand resilience, external trade developments, and financial stability risks, with structural constraints limiting room for further rate cuts.