SINGAPORE: The US is not ready to discuss potential concessions to the 10 per cent baseline tariff on all goods entering the country, Deputy Prime Minister Gan Kim Yong said on Tuesday (Jul 29).
But Singapore has expressed its interest in negotiating that levy, he said in an update on the tariff situation in his first public engagement after returning from a trip to the US from Jul 20 to Jul 26.
Mr Gan added that the US was also "non-committal" as to whether the level of tariffs will remain at 10 per cent. He was speaking at an Institute of Policy Studies (IPS) and Singapore Business Federation (SBF) conference, "Global-City Singapore: SG60 and Beyond", in a dialogue moderated by geopolitics editor at The Economist David Rennie.
Asked by Mr Rennie if it seems like the US is likely to disengage with the world and pull back to its own shores, Mr Gan said he did not get that sense during his trip.
The US still seems keen to work with Europe and build businesses, though their priorities may vary in different periods of time, he said.
Deputy Prime Minister Gan Kim Yong and geopolitics editor of The Economist David Rennie at the IPS-SBF Conference “Global-City Singapore: SG60 and Beyond” on Jul 29, 2025. (Photo: CNA/Faith Ho)
While in the US, Mr Gan met with US Cabinet Secretaries, members of Congress and business and private-sector representatives.
He also participated in a business roundtable organised by the US Chamber of Commerce to discuss international and regional economic developments, and opportunities for collaboration between US and Singapore companies.
Mr Gan said his first question to US officials was whether they were open to negotiations on the 10 per cent tariff that Singapore is subject to, and whether it could be reduced or removed.
“I think the answer for the time being was quite obvious – they are not in the mood to discuss any discount to the baseline tariff,” he said.
“But we also want to put a place marker to remind (the US that) at any point in time, in future, if there's flexibility to discuss the baseline tariff, we are interested in negotiating.”
He also asked officials if the baseline tariff will stay at 10 per cent or if it will go higher or lower.
“The answer was non-committal. They are still reviewing the tariff, and in time to come they will make an appropriate announcement, so we just have to wait and see,” said Mr Gan.
Even if the baseline tariff changes, no one can tell if that will be the final rate, he added, noting that the level of uncertainty has increased.
He said he did not have the chance to meet US Secretary of Commerce Howard Lutnick when he was in Washington, and hence, did not have detailed negotiations on pharmaceutical tariffs.
Mr Gan previously said that the US and Singapore had plans to discuss preferential or “zero” tariffs on pharmaceuticals.
“I think the administration's focus now is to finish the negotiation on reciprocal tariffs, so after that, they will start to engage countries on specific sectoral tariffs on pharmaceuticals and semiconductors,” he said.
There have been discussions on how to ensure Singapore’s access to artificial intelligence equipment and semiconductors, but not on tariffs.
Replying to a question from the moderator Mr Rennie, Mr Gan also said the US does have a rationale for imposing trade tariffs.
“Whether you agree or not, that’s a separate issue,” he said.
The three key considerations are: generating revenue for the US, balancing trade between the US and other countries, and bringing manufacturing back to the US.
“If you look at the baseline tariff, it is fundamentally for purposes of generating revenue for the US administration, partly to fund the tax incentives for the companies and other expenses,” he said.
Reciprocal tariffs are country-specific and are related to whether the US buys more from a country than the country buys from the US.
If the US has a large trade deficit with a country – meaning that the US buys more goods from it than it buys from the US – a higher reciprocal tariff is likely to be applied. That will discourage US consumers from buying goods from that country.
When meeting congressmen in the US, Mr Gan said he tried to emphasise that the US has a trade surplus with Singapore, along with the good relationship and deep engagement between the two countries.
Finally, sectoral tariffs are meant to bring manufacturing industries back to the US to create jobs.
Mr Gan said inflation appears to be muted in the US, though it may be that costs go up in the second half of the year.
He added that the US economy appears to be “relatively resilient”, and businesses are cautiously optimistic.
Another topic that was discussed in the dialogue was whether it is worth negotiating with the US administration, with moderator Mr Rennie noting that a free trade agreement did not protect Singapore from tariffs.
Mr Gan said such agreements remain important to Singapore, given that trade is three times our gross domestic product.
“If not for the free trade agreement, we may not have a baseline tariff,” he pointed out. “This is hypothetic so it’s very difficult to guess.”
But he said free trade agreements are not just about removing tariffs, and Singapore has collaborated with the US in areas such as sustainability, energy and research.
The process of negotiating an agreement deepens understanding between two countries.
As the agreement is implemented, it builds trust and confidence as well, he said.
“I think suffice to say the FTA has a value in strengthening the trade between the two countries and to also put us in a stronger position as we negotiate tariffs with the US.”
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But Singapore has expressed its interest in negotiating that levy, he said in an update on the tariff situation in his first public engagement after returning from a trip to the US from Jul 20 to Jul 26.
Mr Gan added that the US was also "non-committal" as to whether the level of tariffs will remain at 10 per cent. He was speaking at an Institute of Policy Studies (IPS) and Singapore Business Federation (SBF) conference, "Global-City Singapore: SG60 and Beyond", in a dialogue moderated by geopolitics editor at The Economist David Rennie.
Asked by Mr Rennie if it seems like the US is likely to disengage with the world and pull back to its own shores, Mr Gan said he did not get that sense during his trip.
The US still seems keen to work with Europe and build businesses, though their priorities may vary in different periods of time, he said.
Deputy Prime Minister Gan Kim Yong and geopolitics editor of The Economist David Rennie at the IPS-SBF Conference “Global-City Singapore: SG60 and Beyond” on Jul 29, 2025. (Photo: CNA/Faith Ho)
While in the US, Mr Gan met with US Cabinet Secretaries, members of Congress and business and private-sector representatives.
He also participated in a business roundtable organised by the US Chamber of Commerce to discuss international and regional economic developments, and opportunities for collaboration between US and Singapore companies.
Mr Gan said his first question to US officials was whether they were open to negotiations on the 10 per cent tariff that Singapore is subject to, and whether it could be reduced or removed.
“I think the answer for the time being was quite obvious – they are not in the mood to discuss any discount to the baseline tariff,” he said.
“But we also want to put a place marker to remind (the US that) at any point in time, in future, if there's flexibility to discuss the baseline tariff, we are interested in negotiating.”
He also asked officials if the baseline tariff will stay at 10 per cent or if it will go higher or lower.
“The answer was non-committal. They are still reviewing the tariff, and in time to come they will make an appropriate announcement, so we just have to wait and see,” said Mr Gan.
Even if the baseline tariff changes, no one can tell if that will be the final rate, he added, noting that the level of uncertainty has increased.
He said he did not have the chance to meet US Secretary of Commerce Howard Lutnick when he was in Washington, and hence, did not have detailed negotiations on pharmaceutical tariffs.
Mr Gan previously said that the US and Singapore had plans to discuss preferential or “zero” tariffs on pharmaceuticals.
“I think the administration's focus now is to finish the negotiation on reciprocal tariffs, so after that, they will start to engage countries on specific sectoral tariffs on pharmaceuticals and semiconductors,” he said.
There have been discussions on how to ensure Singapore’s access to artificial intelligence equipment and semiconductors, but not on tariffs.
LOGIC BEHIND THE TARIFFS
Replying to a question from the moderator Mr Rennie, Mr Gan also said the US does have a rationale for imposing trade tariffs.
“Whether you agree or not, that’s a separate issue,” he said.
The three key considerations are: generating revenue for the US, balancing trade between the US and other countries, and bringing manufacturing back to the US.
“If you look at the baseline tariff, it is fundamentally for purposes of generating revenue for the US administration, partly to fund the tax incentives for the companies and other expenses,” he said.
Reciprocal tariffs are country-specific and are related to whether the US buys more from a country than the country buys from the US.
If the US has a large trade deficit with a country – meaning that the US buys more goods from it than it buys from the US – a higher reciprocal tariff is likely to be applied. That will discourage US consumers from buying goods from that country.
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When meeting congressmen in the US, Mr Gan said he tried to emphasise that the US has a trade surplus with Singapore, along with the good relationship and deep engagement between the two countries.
Finally, sectoral tariffs are meant to bring manufacturing industries back to the US to create jobs.
Mr Gan said inflation appears to be muted in the US, though it may be that costs go up in the second half of the year.
He added that the US economy appears to be “relatively resilient”, and businesses are cautiously optimistic.
FREE TRADE AGREEMENTS STILL IMPORTANT
Another topic that was discussed in the dialogue was whether it is worth negotiating with the US administration, with moderator Mr Rennie noting that a free trade agreement did not protect Singapore from tariffs.
Mr Gan said such agreements remain important to Singapore, given that trade is three times our gross domestic product.
“If not for the free trade agreement, we may not have a baseline tariff,” he pointed out. “This is hypothetic so it’s very difficult to guess.”
But he said free trade agreements are not just about removing tariffs, and Singapore has collaborated with the US in areas such as sustainability, energy and research.
The process of negotiating an agreement deepens understanding between two countries.
As the agreement is implemented, it builds trust and confidence as well, he said.
“I think suffice to say the FTA has a value in strengthening the trade between the two countries and to also put us in a stronger position as we negotiate tariffs with the US.”
Continue reading...