Singapore warns of global trade war as US tariffs take effect

It does not intend to take countermeasures against US tariffs.

Singapore has warned that escalating global trade tensions sparked by new US tariffs could trigger a global economic slowdown.

“Be can see that some countries are already announcing retaliatory tariffs, and if this tit-for-tat tariff measures continue, it may escalate into a situation where you will end up with a global trade war,” Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong said on Thursday.

He emphasised that the tariffs will significantly impact the global economy, disrupting trade flows, creating choke points for supply chains, and undermining consumer and business confidence. Investments are also expected to slow, which could, in turn, affect Singapore's economic outlook in the medium to long term.

The US has imposed a 10% tariff on all imports, including those from Singapore.

Gan said it was “naturally disappointing” that Singapore was not exempted from the new US measures. “We are naturally disappointed, that despite our strong and long-standing economic and commercial relationship with the US under the US-Singapore Free Trade Agreement (FTA), we are also subject to the same 10% baseline tariff,” he said.

Despite having the right to retaliate under the US-Singapore Free Trade Agreement, Singapore has decided not to do so.

“Imposing retaliatory import duties will just add costs to our imports from the US, and this will affect our consumers and businesses,” Gan said.

Instead, Singapore will engage the US through diplomatic channels.

“What we are going to do is that 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, so that we have a long-lasting partnership,” he said.

The government said it is reviewing the economic impact of the tariff. “This 10% baseline tariff on Singapore will have a significant impact on our economy. Our households and our businesses will have to be prepared for rough waters ahead,” Gan said.

He added that the city-state will continue pushing for open, rules-based trade.

“From Singapore's perspective, we will have to double down on our efforts to continue to keep our economy open,” Gan said.  Singapore is working with trading partners such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Regional Comprehensive Economic Partnership (RCEP), MERCOSUR, and the Pacific Alliance groups to strengthen economic and trade ties.

 “This will help us to open up more avenues for our businesses to explore and to expand,” he said.

Additionally, Singapore remains committed to supporting the World Trade Organization (WTO) to maintain a rules-based international trade system.

“Going forward, it will be choppy waters, but we will continue to monitor the situation, and we will extend additional help where necessary to support our businesses and our households," said Gan.