Singapore disappointed with tariffs, will engage US to clarify calculations: DPM Gan
DPM Gan Kim Yong speaking at a doorstop at the National Press Centre on April 3.
PHOTO: The Straits Times
PUBLISHED ONApril 03, 2025 10:03 AMByOvais Subhani
SINGAPORE — Singapore is disappointed that the US has subjected its goods to tariffs despite the longstanding economic relationship between the two countries and their free trade agreement (FTA), said Deputy Prime Minister Gan Kim Yong on April 3.
And it will engage the US to understand how they have calculated the tariffs, and to clarify any misunderstanding that has led to the 10 per cent levy, he added.
"The US-Singapore FTA has been a very important FTA for both countries, and has benefited the US significantly. US imports to Singapore have enjoyed zero tariffs for more than two decades, and they have also enjoyed a significant, substantial trade surplus with Singapore amounting to $30 billion," he said.
"We are, of course, naturally disappointed. Under the FTA, we have recourse, we are able to take counter measures and also seek dispute resolution. However, we have decided not to do so because imposing retaliatory import duties will just add costs to our imports from the US, and this will affect our consumers and our businesses," he added.
"We will reach out and engage our US counterparts, to better understand their concerns and to see how we can work together constructively to address some of these concerns."
DPM Gan, who is also Minister for Trade and Industry, was speaking to the media following US President Donald Trump's decision to slap a 10 per cent tariff on most goods imported into the United States from Singapore and key partners, with higher duties for many other countries.
Analysts have said that the move could intensify a global trade war and impact growth around the world.
"This 10 per cent baseline tariff on Singapore would have a significant impact on our economy," said DPM Gan.
"Our households and our businesses have to be prepared for rough waters ahead of us," he added.
Singapore is also reassessing its growth forecast for 2025, and it is prepared to offer support to households and businesses, if it is needed, he said.
"It's still early days, because some of the information is still not fully available, so we will need to take time to reassess and to adjust and to see whether there's a need to recalibrate our economic forecasts," he said.
While the tariff of 10 per cent on goods from Singapore is less that than on goods from other countries, there will be an impact on growth if global trade and economic activity slows down significantly, he noted.
He noted that some countries are already announcing retaliatory tariffs.
"If these tit-for-tat tariff measures continue, it may escalate into a situation where you may end up with a global trade war, and this will have a significant impact on the global economy," he added.
"You will affect trade flows, you will create choke points for supply chains, and you will also undermine the confidence of consumers and businesses and investments may also slow down. All these eventually may lead to a significant slowdown in the global economy, and this will also in turn affect Singapore's economic outlook in the medium to long term," he said.
This article was first published in The Straits Times. Permission required for reproduction.