Oct 1 US pharma levies to have no ‘immediate impact’ on Singapore: DPM Gan

SINGAPORE: Singapore’s pharmaceutical industry may not face the “immediate impact” of new US levies, but the city-state may seek a tariff cap similar to Washington’s deals with South Korea, Japan, and the European Union, Deputy Prime Minister Gan Kim Yong said.

“Whether or not it will be exactly the same, that’s something that’s part and parcel of the discussions and negotiation between US and Singapore,” Mr Gan, who is also the minister for trade and industry, added.

Pharmaceuticals make up a key part of Singapore’s exports to the US, accounting for more than S$4 billion, or around 13% of total shipments, including firms such as Pfizer, Amgen and Merck & Co., while Novartis AG and AbbVie run plants locally manufacturing biologics such as Cosentyx and Skyrizi for global markets.

Bloomberg reported that on Saturday, Mr Gan said most pharmaceutical firms in Singapore already have or plan US facilities, which could exempt them from the upcoming tariffs, while they seek clarity on possible exclusions. He added that Singapore is also in talks with Washington on semiconductors but declined to share details as the discussions are confidential.

The US tariffs, announced last week by President Donald Trump, included a 25% duty on imported heavy trucks, 50% on kitchen cabinets, and 30% on upholstered furniture. The US President told companies the new levies would take effect on Oct 1 unless they build plants in the US.

Singapore had earlier avoided the harshest tariffs, facing only a 10% baseline rate compared with up to 40% in some Southeast Asian countries.

Economists at Barclays warned of Singapore’s vulnerability through drug exports and shipments of intermediate goods to other countries. They also estimated the city-state’s effective tariff rate would be just behind Vietnam’s 20% once the new tariffs are implemented.

In July, RHB chief economist Barnabas Gan also flagged rising concerns over Singapore’s export-driven sectors, especially in pharmaceuticals and semiconductors.

Mr Gan said investments will become more competitive in the future, and Singapore will have to compete with many countries, including the US, for new investments—a challenge he noted has existed from the beginning. /TISG

Read also: Singapore negotiating US concessions on pharmaceutical exports and high-end AI chips access

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