Proposed US tariff puts Singapore exports under scrutiny

Around one-third of Singapore’s domestic exports to the US could fall within the scope of the proposed measure.

The US Trade Representative’s proposed 12.5% tariff on Singapore has raised fresh concerns over trade policy uncertainty, according to eToro Singapore market analyst Zavier Wong.

The proposed tariff forms part of a broader Section 301 action covering 60 economies. It cites alleged failures to restrict the import of goods produced through forced labour.

Wong said about one-third of Singapore’s domestic exports to the US fall within the scope of the proposed tariff.

Singapore’s Ministry of Trade and Industry has pushed back against the proposal. Wong noted that Singapore has never appeared on the US Department of Labour’s forced labour goods list and that US Customs has never issued a withhold release order on any Singapore shipment.

He also said Singapore has run a trade deficit with the US for over two decades, contrary to what the USTR’s notice initially claimed.

Wong said the factual case against Singapore appears thin, but warned that Section 301 measures could be more durable than earlier tariff actions because they carry no statutory expiration date or percentage ceiling.

A hearing on the proposal is scheduled to begin on 7 July, ahead of the 24 July expiry of the current 10% Section 122 tariff.

A separate excess capacity investigation covering Singapore is also ongoing, with findings not yet released.

Wong said investors should scrutinise exposure to the US market more closely, as the cost of concentration has increased.

He added that diversification across geographies and sectors has become more urgent, even as the US remains an important market.