Why Singapore’s high-value pharma specialisation now a primary US target

This may weaken future biomedical investment into the city-state.

The main risk from the US’ new pharmaceutical tariff framework may not be immediate trade disruption, but a gradual diversion of global investment away from Singapore, according to CGS International.

The announcement on 2 April to impose tariffs of up to 100% on selected biochemical (HS29) and pharmaceutical (HS30) products introduces fresh uncertainty for Singapore’s biomedical sector.

CGS International views the near-term impact as contained, whilst highlighting a more structural risk from shifting multinational investment decisions that could weaken Singapore’s long-term positioning in high-value manufacturing.

The proposed tariffs primarily target patented biomedical products, an area where Singapore has built significant specialisation.
For HS29 products, patented active pharmaceutical ingredients (APIs) accounted for about $3.17b (US$2.5b) of Singapore’s exports to the US in 2024, compared with $348.52 (US$274m) for generics. In HS30 pharmaceuticals, patented products contributed around $1.52b (US$1.2b) versus just $0.89m (US$0.7m) for generics.

Overall, these categories represent roughly 8.5% of Singapore’s exports to the US and 7.9% of total exports in 2024.

Despite this exposure, CGS International expects limited immediate disruption, citing the phased and conditional nature of implementation, which may soften short-term trade impacts.

The tariff framework effectively incentivises firms to shift production to the US. Companies with US manufacturing presence or onshoring commitments may receive preferential treatment or exemptions.

However, exemptions appear tied to specific products rather than full corporate operations, meaning offshore production serving the US market could still be exposed unless capacity is relocated.

CGS International notes that this structure effectively raises the relative cost of offshore manufacturing for US-bound products, increasing the attractiveness of locating higher-value or final-stage production within the US..

The key concern, CGS noted, is not immediate export loss but a gradual reallocation of multinational corporations’ capital expenditure.

Over time, firms may channel a larger share of incremental investment into the US to secure tariff advantages and maintain market access.

“Such a shift could weigh on Singapore’s ability to attract future high value-added and downstream production, particularly in patented pharmaceutical segments where value concentration is higher,” the report said.

The risk is particularly relevant for patented pharmaceutical manufacturing, where value concentration is highest and investment decisions are most mobile.

CGS International warned that this could gradually erode Singapore’s relative positioning as a preferred hub for advanced biomedical production.

Near-term impact remains limited due to phased implementation and conditional exemption, but the vulnerability lies in future expansion plans rather than existing operations.

CGS International expects partial offset from policy engagement, as firms with existing US investments may qualify for exemptions.

Singapore can also mitigate risks through continued upgrading in biologics, advanced manufacturing, and ecosystem depth supported by the Economic Development Board.

“The reshoring of new facility in the US will take years, allowing Singapore time to re-strategise,” CGS said.

“Meanwhile, potential legal challenges from the US Supreme Court may introduce some delays or carve-outs, but are unlikely to materially alter the broader US reshoring incentive, in our view," it added.