SINGAPORE: Even as the “Liberation Day” tariffs announced by United States President Donald Trump took effect on Wednesday (April 9), upending global trade and sparking fears of a recession in the world’s largest economy, there may yet be a silver lining, according to a report by Reuters.
The report listed the “potential winners” from the “onslaught” of the tariffs, which included Singapore among the countries that could benefit due to gaps in global trade. Reuters listed Egypt, Morocco, Brazil, Turkey, and Kenya as the other countries that may see a similar advantage.
At the other end of the scale, it also noted that a number of the US’ longtime trading partners and allies, including the European Union, Japan, and South Korea, have been slapped with tariffs of 20 per cent or even higher. India, despite a 26 per cent tariff, was listed among the “potential winners” by Reuters.
Singapore, meanwhile, faces the lowest-tier increase in tariffs, 10%, which is substantially smaller than others in the region, such as Vietnam (46%), Bangladesh (37%), Taiwan (32%), and Malaysia (24%).
The Reuters report called the 10% tariffs imposed on countries such as Brazil “more of a slap on the wrist in the new Trump world order” and noted that the countries where the smallest tariffs were imposed “could find an opportunity in the distress of those, like Bangladesh and Vietnam, which both run big surpluses and have been hit hard by Trump”.
Nevertheless, while Singapore emerged in a better place than its neighbours tariff-wise, the city-state has been bracing itself for the fallout. On April 4, Prime Minister Lawrence Wong said in a video response to the tariffs that Mr Trump’s “Liberation Day” announcement had “marked a seismic change in the global order” and warned that because of Singapore’s trade-reliant economy, it would be affected more than other countries.
“International trade and investments will suffer, and global growth will slow… we cannot expect that the rules, which protected small states, will still hold. I am sharing this with you so that we can all be mentally prepared, so that we will not be caught off guard. Let us not be lulled into complacency. The risks are real. The stakes are high,” he said, calling for Singaporeans to stay united in order to help the country to “hold its own in this troubled world”.
On April 7, the Straits Times Index saw a 7.5% decrease, its largest fall in 17 years, and the decline continued through thnextst day,
Reuters quoted OCBC economist Selena Ling as saying that if the US and/or the global economy goes into a recession or hits a hard stop, there would be no winners.
“Singapore cannot win in global trade war, given the heavy reliance on trade,” Maybank economist Chua Hak Bin told Reuters.
The report has since generated many comments online, though a number of netizens questioned the idea of there being any winners at all.
One Reddit user noted, “Pharmaceuticals and semiconductors are exempted from Trump tariffs. Those are the largest categories of Singapore’s exports to the U.S. but in a global downturn, Singapore will be affected.”
However, the US President said on April 9 that he will soon be announcing tariffs on pharmaceuticals as well.
“There are no winners in a trade war, there’s always a tradeoff elsewhere. Direct level services like financial, tourism and services are already taking a big hit as we speak. It’s not a zero sum game where one side wins and another side loses. There’s many facets in this space, either way Trump has singlehandedly made history again with his cronies by putting America’s trustworthiness on the line here. It’s allies, friends and investors will no longer have the same level of trust and friendship it previously established over the years,” another commented. /TISG
Read also: Singapore will take a bigger hit than others; stability won’t return anytime soon: PM Lawrence Wong