SINGAPORE: On Apr 3, Deputy Prime Minister (DPM) Gan Kim Yong said that the US government’s move to place extensive tariffs on imported products would have a substantial effect on the Singaporean economy and could lead to an international trade war. DPM Gan spoke to the media after US President Donald Trump imposed a 10% tariff on many goods imported from Singapore to the US.
Experts believe that such a move could spur a worldwide trade war and affect growth around the world.
DPM Gan further said that Singapore households and businesses will need to be prepared for difficult times ahead. Currently, the government is re-evaluating its growth estimates for 2025, and it is prepared and equipped to provide support to families and industries when necessary.
According to the latest Straits Times report, DPM Gan said that it is still too soon to say anything with finality since not all information has been gathered; thus, they need to fully review and fine-tune and to see whether they must recalibrate their economic calculations.
Although the 10% tariff on products from Singapore is less than that on goods from other nations, DPM Gan noted that it will affect growth if international trade and economic movements slow down considerably.
He emphasized that several countries are already declaring reciprocal tariffs on US products.
DPM Gan warns that if these punitive tariff measures persist, then they may intensify into a state that can result in a global trade war, which will, in turn, have a sizeable impact on world affairs and a strong effect on the economy.
“It will affect trade flows. You will create choke points for supply chains and also undermine the confidence of consumers and businesses. Investments will also slow down. All these eventually will significantly slow down the global economy. This will also, in turn, affect Singapore’s economic outlook in the medium to long term,” he further added.
DPM Gan told journalists that Singapore is disenchanted with the US move because the US and Singapore have had a venerable economic bond and a free trade agreement (FTA).
DPM Gan said the city-state would consequently engage the US to elucidate how it has designed the tariffs and explain any misinterpretation that has led to the 10% levy.
According to the Deputy Minister, “The US-Singapore FTA has been an extremely vital FTA for both nations, which has profited the US meaningfully. For over 20 years, US imports to Singapore have enjoyed zero tariffs. The country has likewise enjoyed a noteworthy and substantial trade excess with Singapore, amounting to S$30 billion,” he said. Naturally, Singapore is disappointed.
The Minister further explained that Singapore has an option under the FTA. It can take countermeasures and also pursue dispute resolution. However, the country decided not to do this because imposing retaliatory import duties would just increase the cost of the country’s imports from the US, which would impact Singaporean customers and businesses.
“We will reach out and engage our US counterparts and better understand their concerns, see how we can work together constructively to address some of these concerns.”
