Thailand Proposes 2026 Budget Amid US Tariff Growth Challenges

Thailand is navigating economic challenges driven by steep U.S. tariffs, with Prime Minister Paetongtarn Shinawatra proposing a 3.78 trillion baht budget for the 2026 fiscal year that aims for a modest 0.7% spending increase and a projected fiscal deficit reduction to 860 billion baht. Despite export growth exceeding expectations in April, reaching 10.2% year-on-year and driven by strong shipments to the U.S. and other key markets, concerns remain about the impact of potential 36% U.S. tariffs after a July moratorium expires, which could slow growth to just over 1% in 2025, according to Thailand's finance minister. The government faces political uncertainty due to coalition tensions and policy disagreements that may affect the budget's approval. Meanwhile, Taiwan's economy, heavily reliant on trade and technology sectors, is expected to grow more slowly in 2025 amid similar tariff uncertainties, with revised GDP growth forecasts lowered to 3.1% from earlier projections. Both economies illustrate regional vulnerabilities to U.S. trade policy shifts, with Thailand focusing on sustaining export momentum and managing inflation, while Taiwan adjusts growth expectations in light of global supply chain pressures. These developments highlight the broader economic impact of U.S. tariffs on key Asian trading partners and their efforts to balance growth and political stability.