So long, good times. They are over for Singapore. Prime Minister Lawrence Wong delivered the bad news straight to the nation in a YouTube video, speaking to the camera without an interviewer in sight.
With a desk to one side, an array of books behind him, wearing a blue shirt with rolled-up sleeves, Mr Wong, an economist educated in the US, explained the dangers confronting Singapore following the US Liberation Day (April 2) tariffs. Although the tariff on Singapore is low, the city-state could be hit harder than other countries because it is heavily dependent on trade, said Mr Wong.
Speaking simply, Mr Wong recalled: “I have said before that the world is changing in ways that will disadvantage small open economies like Singapore. Some had previously questioned this assessment. But the recent Liberation Day announcement by the US leaves no room for doubt. It marks a seismic change in the global order. The era of rules-based globalisation and free trade is over. We are entering a new phase that is more arbitrary, protectionist and dangerous.”
The Prime Minister conceded the US tariff on Singapore was low.
“The US has placed Singapore in the lowest base tier with a tariff of 10%. So, the direct impact on us may be limited for now.
‘We risk being squeezed out’
“But there are wider and more profound consequences. If other countries adopt the same approach as the US, abandoning the WTO and trading only on their own preferred terms, country by country, it will spell trouble for all nations, especially small ones like Singapore. We risk being squeezed out, marginalised and left behind.”
“The likelihood of a full-blown global trade war is growing,” said Mr Wong. “The impact of the higher tariffs plus the uncertainty of what other countries may do next will weigh heavily on the global economy. International trade and investments will suffer, and global growth will slow. Singapore will take a bigger hit than others because of our heavy reliance on trade.
“The last time the world experienced something like this was in the 1930s. Trade wars escalated into armed conflict and eventually the Second World War,” Mr Wong recalled, alluding to the protectionism and the Great Depression that marked the 1930s when the rise of Hitler culminated in the world war.
“No one can say how the current situation will unfold in the coming months or years, but we must be clear-eyed about the dangers that are building up in the world. We will stay vigilant; we will build up our capabilities. We will strengthen our network of partnerships with like-minded countries. We are more ready than many other countries with our reserves, our cohesion and our resolve,” said Mr Wong.
“But we must brace ourselves for more shocks to come. The global calm and stability we once knew will not return anytime soon. We cannot expect that the rules which protected small states will still hold.”
Mr Wong ended the five-minute video by explaining why he posted it: “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, and the stakes are high. The road ahead will be harder. But if we stay resolute and united, Singapore will continue to hold its own in this troubled world.”
He concluded with a smile, but it was a rueful smile, not sunny and carefree.
The Facebook post garnered 3,800 “likes”, 248 comments and 567 shares in five hours, with the comments mostly supporting the Prime Minister, though some struck a different note. “Side with China, isolate the USA,” urged one while another exclaimed, “Waa… never see Lawrence Wong so angry before.”
