Introduction

SINGAPORE – In a stark warning, Deputy Prime Minister Gan Kim Yong stated that the recent decision by the United States to impose a broad range of tariffs could significantly disrupt Singapore’s economy and potentially trigger a global trade war.

US Tariffs on Singapore

On April 3, DPM Gan, who also serves as Minister for Trade and Industry, spoke to the press about President Donald Trump’s implementation of a 10% tariff on numerous goods imported from Singapore and other key trading partners. This decision echoes concerns raised by analysts, who posit that such tariffs may incite retaliatory measures from other nations, escalating into widespread trade tensions that could affect global economic growth.

“This 10% baseline tariff on Singapore will have a considerable impact on our economy,” DPM Gan stated, urging households and businesses to brace for challenging times ahead. As Singapore evaluates its economic forecast for 2025, he emphasized the necessity for caution and readiness to provide support for its citizens and the business community, should conditions worsen.

Economic Impact

While DPM Gan acknowledged that Singapore's tariff rates are lower than those imposed on other countries, he cautioned that significant slowdowns in global trade could still adversely affect Singapore's economic stability. “The consequences of these tariffs will trickle down to impact trade flows and could pose choke points in our supply chains. This undermines consumer and business confidence, which can lead to a slowdown in investments,” he elaborated.

Furthermore, he noted that several countries have already begun to announce retaliatory tariffs, raising the prospect of a spiraling trade conflict. “If these tit-for-tat measures persist, we could find ourselves in a full-blown global trade war, which will inevitably sway the global economy and, consequently, Singapore’s economic outlook in the medium to long term,” he warned.

Diplomatic Disappointment and Engagement with the US

Expressing disappointment over the US decision, DPM Gan highlighted the longstanding economic relationship between Singapore and the United States, underpinned by a free trade agreement (FTA) that has benefited both nations significantly. He stated that Singapore plans to engage with US officials to better understand the rationale behind the tariffs and to clarify any potential misconceptions leading to this levy.

“Over the last two decades, US goods exported to Singapore have faced zero tariffs, resulting in a substantial trade surplus of approximately $30 billion,” he noted. However, in light of the current situation, DPM Gan indicated that Singapore will not retaliate with tariffs, as such actions would only serve to increase costs for consumers and businesses alike.

Commitment to Free Trade

Instead, Singapore is committed to maintaining a free and open economy and reinforcing its position in global trade. “We are actively engaging with other trade partners, particularly within ASEAN, to identify ways to collaboratively navigate these challenging times,” he stated.

ASEAN presents a strategic platform for discussions among member states regarding mutual support amid supply chain disruptions caused by new tariffs. DPM Gan stressed the importance of solidarity in ensuring economic stability across the region.

Conclusion

Actively seeking to bolster the World Trade Organization, Singapore remains dedicated to upholding a multilateral trade framework that fosters international collaboration and compliance with trade regulations.

In conclusion, as the world watches the unfolding implications of the US tariff initiative, Singapore stands poised to adapt and respond, striving to protect its economic interests while fostering cooperative relationships with global partners. The stakes are high, and the path ahead remains uncertain—could this be the beginning of a new global trade era?