PUBLISHED ONApril 04, 2025 2:28 PMBySean LerSingapore may be placed in the lowest base tier - with a tariff of 10 per cent on goods - but there are "wider and more profound consequences", said Prime Minister Lawrence Wong in a YouTube video on Friday (April 4).
This is even though the direct impact on Singapore may be limited "for now", he said.
His comments come two days after US President Donald Trump imposed sweeping new tariffs on goods imported from the rest of the world on what he called "Liberation Day".
Trump claims that the tariffs will boost the US economy and protect jobs.
PM Wong pointed out that if other countries adopt the same approach as the US, Singapore may take a bigger hit than others, because of our heavy reliance on trade.
"Singapore has decided not to impose retaliatory tariffs. But other countries may not exercise the same restraint.
"The likelihood of a full-blown global trade war is growing.
"The impact of the higher tariffs, plus the uncertainty of what countries may do next, will weigh heavily on the global economy. International trade and investments will suffer, and global growth will slow," he said.
Hours before PM Wong's video was uploaded on his social media accounts, China announced retaliatory tariffs of 34 per cent on all US goods.
Nations such as Canada are also said to be readying retaliation.
Investment bank JP Morgan said it now sees a 60 per cent chance of the global economy entering recession by year-end, up from 40 per cent previously.
Describing it as a "seismic change in the global order", PM Wong said that the era of rules-based globalisation and free trade is over, replaced by one that is "more arbitrary, protectionist, and dangerous."
"For decades, the US was the bedrock for the free market economies of the world.
"It championed free trade, and led efforts to build a multilateral trading system, anchored by clear rules and norms, where countries could achieve win-win benefits through trade," he said.
This World Trade Organization (WTO) system, said PM Wong, brought unprecedented stability and prosperity to the world and to the US.
The system is not perfect, acknowledged PM Wong, and Singapore, along with many others, have called for reform to update the rules and to make the system better.
"But what the US is doing now is not reform.
"It is abandoning the entire system it has created. Its new approach of reciprocal tariffs, country by country, is a complete rejection of the WTO framework," he added.
Recalling how the last time the world experienced something like this was in the 1930s, PM Wong noted how trade wars then escalated into armed conflict and ultimately, the Second World War.
"No one can say how the current situation will unfold in the coming months or years. But we must be clear-eyed about the dangers that are building up in the world," said PM Wong.
"Global institutions are getting weaker; international norms are eroding. More and more countries will act based on narrow self-interest, and use force or pressure to get their way.
"This is the harsh reality of our world today," he added.
While the risks are real and stakes high, PM Wong said that Singapore is more ready than many other countries, with its reserves, cohesion and resolve.
He asked for Singaporeans to stay vigilant as Singapore build up its capabilities and strengthen networks with like-minded countries.
"But we must brace ourselves for more shocks to come. The global calm and stability we once knew will not return anytime soon. We cannot expect that the rules which protected small states will still hold," he said.
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