SINGAPORE: Leader of the Opposition Pritam Singh and other opposition Members of Parliament on Tuesday (Apr 8) sought more clarity on the government's response to sweeping tariffs by the United States.
Speaking after Prime Minister Lawrence Wong's ministerial statement on the tariffs, Mr Singh noted it was still "early days", but that there had been references to derisking and decoupling in the world economy "for some years".
The Workers' Party chief asked whether the government’s response would involve boosting domestic consumption and productivity, notwithstanding Singapore's small domestic market.
"Do we foresee major structural changes in the way the Singapore economy is shaped, to deal with the new future that we see – which, in the prime minister's words, is far more unpredictable than before?" he asked.
Mr Wong, who is also finance minister, responded that existing capability building will continue, and that the government will "redouble" efforts as it has the fiscal resources to do so.
In Budget 2025, the government set aside more resources to build capacity in innovation and new technologies, which are key drivers for a “strong, dynamic and vibrant” economy, he said.
The government was also investing in human capital and skills upgrading through SkillsFuture, which is a "key pillar in our social compact", said Mr Wong.
Earlier, he announced the formation of a task force to support businesses and workers in response to the US tariffs, which could slow economic growth and impact jobs and wages.
"We will continue the review and the monitoring of the global situation, and if there is a need, we will provide further updates to Singaporeans as and when we are ready, and as and when there is a need to," said Mr Wong.
The task force will be chaired by Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong and include representatives from economic agencies, unions and the private sector.
Mr Gan also responded to MP Jamus Lim (WP-Sengkang), who asked if the government would rebalance the economy towards domestic demand for "short-run stabilisation”.
Mr Gan cautioned that overstimulating demand could result in inflationary pressures and that Singapore's small economy "will not be able to move the needle".
MPs also raised questions on whether Singapore is in an advantageous position compared with other countries since Singapore faces the minimum tariff rate of 10 per cent.
Many other countries in Asia have been slapped with far higher tariff rates, including Vietnam, Indonesia and Thailand.
“Does the government not believe that this will put us in a stronger competitive position to continue exporting to the US?” asked Non-Constituency Member of Parliament (NCMP) Leong Mun Wai.
Mr Wong, however, said the overall environment and the era of higher trade barriers is not good for Singapore.
“Should we take comfort that we are in the lowest tier? Well, I suppose if you want to see silver linings in dark clouds, you can say so,” he said.
But as a country that relies on trade and external markets, the tariffs are detrimental to Singapore’s longer term prospects.
“I take no comfort at all in us being in the lowest tier, and I think that we have to brace ourselves for a much bumpier ride ahead.”
Mr Gerald Giam (WP-Aljunied) pointed out that regional competitors such as Taiwan, South Korea and Malaysia have been hit with tariffs of between 24 per cent and 32 per cent.
“This could present a near-term cost advantage for Singapore firms exporting semiconductors, telecoms equipment and electronics to the US, relative to exports from these higher-tariffed countries,” he said.
He asked if Singapore was stepping up efforts to help companies secure demand before supply chains are reorganised and new sourcing arrangements locked in.
Mr Gan said that is part and parcel of the task force’s strategy, and that it will look at both shorter and longer term measures.
In the medium to longer term, Singapore will work with industries to attract more investments so they are anchored here.
“But always also bear in mind, as we have more investments into Singapore … taking advantage of the lower tariffs, as you mentioned, to export to the US, our trade balance will start to shift,” he said.
Singapore currently has a trade deficit with the US, meaning Singapore buys more goods from the US than it sells to the US. United States President Donald Trump has taken aim at countries that run large trade surpluses with the US.
Mr Gan said Singapore would need to be careful in potentially increasing exports to the US.
He also highlighted various complexities, such as demand for Singapore’s goods falling because our trading partners who face higher tariffs are not selling as much to the US anymore.
“This is an entire global chain effect, so we should not look at it just simply from any particular single segment of the trade,” he said. “It is going to change the entire playing field.”
MPs asked how Singapore intends to negotiate with the US and whether it will leverage the bargaining power of blocs it is part of – the Association of Southeast Asian Nations (ASEAN) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
ASEAN countries are among the hardest hit by the US tariffs, and the bloc’s economic ministers will hold a special meeting on Thursday to discuss a coordinated regional response.
Mr Gan said Singapore was working with ASEAN and CPTPP nations and other trade organisations to discuss their negotiating strategy towards the US.
He said the discussions would also cover how to further strengthen and deepen regional integration, “which will be helpful to our economies as well”.
Singapore will also actively engage members of the Trump administration to understand their concerns about the bilateral trade relationship and “address any misperceptions”, said Mr Wong.
But the prime minister said that historically, when tariffs are raised, it is “very hard for them to come back down again”, and the US has indicated that the base tier of 10 per cent is not up for negotiation.
49:31 Min
In parliament on Tuesday (Apr 8), Prime Minister and Finance Minister Lawrence Wong and Deputy Prime Minister and Trade and Industry Minister Gan Kim Yong responded to clarifications sought by members of the House after Mr Wong’s ministerial statement on US tariffs and their implications for Singapore.
NCMP Hazel Poa echoed other MPs on finding opportunity in crisis, saying she was “glad to hear that the government is trying to convert this challenge into an impetus to push for free trade with the rest of the world”.
She asked whether the US’ tariff on Singapore violated the free trade agreement (FTA) between the two countries.
Mr Gan replied that imposing import duties violated the FTA, but there were exceptions in the event of an “economic emergency”, and the US had invoked emergency powers for the tariffs.
“We are first going to embark on a consultation … to first understand what their concerns are that caused them to introduce this basic tariff rate. And eventually, whether or not we want to take action is something that we will have to consider,” he said.
The FTA provides for counter tariffs, but Mr Gan reiterated that Singapore does not anticipate levying retaliatory import duties on the US for now.
Even if it was not possible to negotiate for a reduction or waiver of the base tariff rate on Singapore, engaging the US was still useful to prevent further escalation of tariffs, he added.
Continue reading...
Speaking after Prime Minister Lawrence Wong's ministerial statement on the tariffs, Mr Singh noted it was still "early days", but that there had been references to derisking and decoupling in the world economy "for some years".
The Workers' Party chief asked whether the government’s response would involve boosting domestic consumption and productivity, notwithstanding Singapore's small domestic market.
"Do we foresee major structural changes in the way the Singapore economy is shaped, to deal with the new future that we see – which, in the prime minister's words, is far more unpredictable than before?" he asked.
Mr Wong, who is also finance minister, responded that existing capability building will continue, and that the government will "redouble" efforts as it has the fiscal resources to do so.
In Budget 2025, the government set aside more resources to build capacity in innovation and new technologies, which are key drivers for a “strong, dynamic and vibrant” economy, he said.
The government was also investing in human capital and skills upgrading through SkillsFuture, which is a "key pillar in our social compact", said Mr Wong.
Earlier, he announced the formation of a task force to support businesses and workers in response to the US tariffs, which could slow economic growth and impact jobs and wages.
"We will continue the review and the monitoring of the global situation, and if there is a need, we will provide further updates to Singaporeans as and when we are ready, and as and when there is a need to," said Mr Wong.
The task force will be chaired by Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong and include representatives from economic agencies, unions and the private sector.
Mr Gan also responded to MP Jamus Lim (WP-Sengkang), who asked if the government would rebalance the economy towards domestic demand for "short-run stabilisation”.
Mr Gan cautioned that overstimulating demand could result in inflationary pressures and that Singapore's small economy "will not be able to move the needle".
SILVER LININGS?
MPs also raised questions on whether Singapore is in an advantageous position compared with other countries since Singapore faces the minimum tariff rate of 10 per cent.
Many other countries in Asia have been slapped with far higher tariff rates, including Vietnam, Indonesia and Thailand.
“Does the government not believe that this will put us in a stronger competitive position to continue exporting to the US?” asked Non-Constituency Member of Parliament (NCMP) Leong Mun Wai.
Mr Wong, however, said the overall environment and the era of higher trade barriers is not good for Singapore.
“Should we take comfort that we are in the lowest tier? Well, I suppose if you want to see silver linings in dark clouds, you can say so,” he said.
But as a country that relies on trade and external markets, the tariffs are detrimental to Singapore’s longer term prospects.
“I take no comfort at all in us being in the lowest tier, and I think that we have to brace ourselves for a much bumpier ride ahead.”
Mr Gerald Giam (WP-Aljunied) pointed out that regional competitors such as Taiwan, South Korea and Malaysia have been hit with tariffs of between 24 per cent and 32 per cent.
“This could present a near-term cost advantage for Singapore firms exporting semiconductors, telecoms equipment and electronics to the US, relative to exports from these higher-tariffed countries,” he said.
Related:
He asked if Singapore was stepping up efforts to help companies secure demand before supply chains are reorganised and new sourcing arrangements locked in.
Mr Gan said that is part and parcel of the task force’s strategy, and that it will look at both shorter and longer term measures.
In the medium to longer term, Singapore will work with industries to attract more investments so they are anchored here.
“But always also bear in mind, as we have more investments into Singapore … taking advantage of the lower tariffs, as you mentioned, to export to the US, our trade balance will start to shift,” he said.
Singapore currently has a trade deficit with the US, meaning Singapore buys more goods from the US than it sells to the US. United States President Donald Trump has taken aim at countries that run large trade surpluses with the US.
Mr Gan said Singapore would need to be careful in potentially increasing exports to the US.
He also highlighted various complexities, such as demand for Singapore’s goods falling because our trading partners who face higher tariffs are not selling as much to the US anymore.
“This is an entire global chain effect, so we should not look at it just simply from any particular single segment of the trade,” he said. “It is going to change the entire playing field.”
WORKING WITH PARTNERS
MPs asked how Singapore intends to negotiate with the US and whether it will leverage the bargaining power of blocs it is part of – the Association of Southeast Asian Nations (ASEAN) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
ASEAN countries are among the hardest hit by the US tariffs, and the bloc’s economic ministers will hold a special meeting on Thursday to discuss a coordinated regional response.
Mr Gan said Singapore was working with ASEAN and CPTPP nations and other trade organisations to discuss their negotiating strategy towards the US.
He said the discussions would also cover how to further strengthen and deepen regional integration, “which will be helpful to our economies as well”.
Singapore will also actively engage members of the Trump administration to understand their concerns about the bilateral trade relationship and “address any misperceptions”, said Mr Wong.
But the prime minister said that historically, when tariffs are raised, it is “very hard for them to come back down again”, and the US has indicated that the base tier of 10 per cent is not up for negotiation.
49:31 Min
In parliament on Tuesday (Apr 8), Prime Minister and Finance Minister Lawrence Wong and Deputy Prime Minister and Trade and Industry Minister Gan Kim Yong responded to clarifications sought by members of the House after Mr Wong’s ministerial statement on US tariffs and their implications for Singapore.
NCMP Hazel Poa echoed other MPs on finding opportunity in crisis, saying she was “glad to hear that the government is trying to convert this challenge into an impetus to push for free trade with the rest of the world”.
She asked whether the US’ tariff on Singapore violated the free trade agreement (FTA) between the two countries.
Mr Gan replied that imposing import duties violated the FTA, but there were exceptions in the event of an “economic emergency”, and the US had invoked emergency powers for the tariffs.
“We are first going to embark on a consultation … to first understand what their concerns are that caused them to introduce this basic tariff rate. And eventually, whether or not we want to take action is something that we will have to consider,” he said.
The FTA provides for counter tariffs, but Mr Gan reiterated that Singapore does not anticipate levying retaliatory import duties on the US for now.
Even if it was not possible to negotiate for a reduction or waiver of the base tariff rate on Singapore, engaging the US was still useful to prevent further escalation of tariffs, he added.
Continue reading...