PM Wong on US tariffs: Growth will be impacted, leading to fewer opportunities and smaller wage increases

Prime Minister Lawrence Wong has said that Singapore "may or may not" go into recession this year, but warned that the economic growth will be "significantly impacted" after US tariffs come into effect on April 9.

Delivering a statement in Parliament on Tuesday (April 8), PM Wong said that slower growth here means fewer job opportunities and small wage increases for workers.

This comes after Trump administration last week imposed a baseline tariff rate of 10 per cent on Singapore and other countries.

PM Wong, who is also finance minister, said it does not look like the tariff is open for negotiation, pointing out that "once trade barriers go up, they tend to stay up".

This will lead to sectors such as manufacturing, wholesale trade, transport, and finance, suffering the brunt of the impact.

He added that the Ministry of Trade and Industry (MTI) is reassessing the gross domestic product growth forecast for this year, originally projected at one to three per cent, and will likely revise it downwards.

"If more companies face difficulties or relocate their operations back to the US, there will be higher retrenchments and job losses."

He announced that the Government will set up a new task force to help businesses and workers "address the immediate uncertainties, strengthen their resilience, and better adapt to the new economic environment".

Chaired by Deputy Prime Minister Gan Kim Yong, the task force will include representatives from Singapore's economic agencies, the Singapore Business Federation, the Singapore National Employers Federation and the National Trades Union Congress (NTUC).

PM Wong said that the raft of measures announced in Budget 2025 will provide support to help Singaporeans deal with any short-term strain.

These include CDC vouchers, SG60 vouchers and USave rebates to help with their cost of living.

Those involuntarily unemployed will also receive support through the SkillsFuture Jobseeker Support scheme which will start later this month,

He said that the Government's economic agencies are also engaging the firms impacted by the tariffs to better understand their responses and assist them with any issues they face.

"We will continue to monitor developments closely. The government stands ready to do more, if and when necessary," added PM Wong. "We have the resources to do so because of the financial discipline and prudence we've exercised over the decades."

Responding to several supplementary questions from MPs, PM Wong said that he believes that no additional measures to support Singaporeans are needed for now.

"But the task force will monitor, assess and put up recommendations when ready," he said.

DPM Gan, who is also Trade and Industry Minister, told Parliament that one of the responsibilities of the taskforce will gather information from the ground through the private sector representatives, understand the challenges enterprises are facing and discuss how to support them.

"We do expect jobs to be affected. Not immediately, but in the medium to long-term," he said. "I think that there will be a major restructure of the economy that will result in restructuring the workforce as well.

“When we know something important, we’ll share with the population, with the businesses, with the workers, with the unions and with members. And when we don’t know yet, we’ll tell you honestly we do not have the information yet.”

Danger from tariffs 'real': PM Wong 

PM Wong warned that the dangers from the tariffs "are real".

Suggesting that more countries are turning away from win-win co-operation and deeper integration, PM Wong said that Singapore will keep their economy open and create new value propositions for investors and businesses.

"We will act boldly and decisively, when needed, to ensure Singapore continues to succeed… we will put the interests of Singapore and Singaporeans at the centre of everything we do," he adding, while reiterating that the country must stay united to "make it through the gathering storm".

Last week, he had called for Singaporeans to stay united while "bracing for more shocks to come".

But several opposition politicians refuted the Government's strong warnings about the tariffs.

Progress Singapore Party chief Leong Mun Wai said that "the topic is a little overblown" and that worries about inflation are unfounded.

The Non-constituency Member of Parliament added that Singapore has always managed to overcome difficulties of much larger scale.

Party chairman Dr Tan Cheng Bock went further, suggesting that the Government's response is to "to instil fear in the voter".

"So the voter will be so frightened to vote for the incumbent," he said, adding that the tariffs must be studied carefully.

In contrast, Leader of the Opposition Pritam Singh backed PM Wong's call for unity in the face of "significant uncertainties".

The Workers' Party (WP) chief added that a united society is one where all Singaporeans are represented in Parliament.

"Unity in diversity, regardless of race or religion, is Singapore's best response to an unknown future," said Singh.

"It is for this very reason that the WP has long called for a rational and responsible opposition politics in this country we call home. That call continues to evolve with the importance of a loyal opposition."

chingshijie@asiaone.com

For more original AsiaOne articles, visit here.