Export-oriented industries to bear the brunt of rising trade tensions—report

Policymakers are concerned about sectoral tariffs on pharmaceuticals and semiconductors.

Outlook for Singapore’s export-oriented industries such as chemicals, machinery & transport, and manufacturing are bearish on the back of a broader impact of rising trade tensions, a report by RHB said.

Group Chief Economist & Head, Market Research Barnabas Gan noted that based on their recent engagement with Singapore’s policymakers, they noted growing concerns on sectoral tariffs, especially on pharmaceuticals and semiconductors.

Semiconductors, consumer electronics and pharmaceutical goods account for about 40% of Singapore's domestic exports to the US in 2024. Meanwhile, pharmaceuticals account for approximately 12.3% of the city-state's domestic exports to the US.

Gan said the officials highlighted concerns that a 25% tariff could be placed on both the pharmaceuticals and semiconductor sectors, and these will likely further weigh on Singapore’s exports.

However, they are expecting some positive outcomes from the negotiation talks with the US on pharmaceutical tariffs, thereby looking forward to shielding one of the most vital industries of the economy from the widening US trade conflict.

The comment comes after Singapore reported that its non-oil domestic exports (NODX) 13.0% year-on-year (YoY) in June 2025, rebounding sharply from a 3.9% YoY decline in May, driven by gains in both electronic and non-electronic exports.

However, Gan noted that this growth may be related to front-loading activities, as companies anticipate the return of US tariffs.