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Singapore Deputy PM Gan Kim Yong rules out immediate retaliation against US tariffs, citing close ties and economic impact concerns.
Singapore Deputy Prime Minister Gan Kim Yong ruled out any immediate retaliation against the US after it imposed a 10 per cent baseline global tariff that threatens to have a “significant impact” on the trading hub’s economy.
“We are naturally disappointed,” Gan, who is also minister for trade and industry, told reporters on Thursday, indicating officials will seek talks over the levies. He cited the two nations’ traditionally close ties, and a longstanding free-trade agreement with the US that has mutually benefited both sides.
Gan said that the government has decided not to impose countermeasures despite being able to do so under the trade pact, because retaliatory import duties will just add costs for Singapore.
The city-state will be subject to the minimum universal tariff on all exports to the US, though it was spared the higher levies inflicted on many other Asian nations, including a total of 54 per cent on China and 46 per cent on Vietnam. But the traditionally trade-reliant financial centre is likely to be affected indirectly, particularly if other countries respond with tariffs of their own.
“Singapore is likely the most susceptible to a tariff-induced external slowdown” among six of Southeast Asia’s key economies, known as ASEAN-6, according to local lender United Overseas Bank Ltd. in a note Thursday.
The US recorded a trade surplus of about $2.8 billion with Singapore in 2024, data from the US Census Bureau shows.
Gan said Singapore will have to reassess the outlook for the economy, which was expected to slow even before Trump imposed the new levies. In February, the city-state forecast growth of 1 per cent-3 per cent this year, down from 4.4 per cent in 2024.
“I’m not saying we will definitely revise it downwards, but I think the situation has turned out to be worse” than we had expected, “and therefore it is necessary for us to revisit our assumptions,” he said.
Prime Minister Lawrence Wong had already set aside nearly S$124 billion ($93 billion) in the 2025 fiscal year for a range of spending including airport upgrades and measures to address rising living costs, such as supermarket vouchers and utility rebates.
Wong’s predecessor Lee Hsien Loong said in a separate Facebook post that the current budget provides adequate support although the government will intervene if necessary.
Gan’s late afternoon comments came after the Monetary Authority of Singapore said it’s assessing the implications for the local economy. MAS “stands ready to curb excessive volatility” in the local currency, the central bank said.
The tariffs on Southeast Asia were more “draconian” than feared, economist Tamara Mast Henderson wrote in a note for Bloomberg Economics, with Vietnam hit the hardest. “Growth in Malaysia, Thailand and Singapore — where US exports amount to 8-12 per cent of GDP — will also get hammered,” she wrote in a note Thursday.
More stories like this are available on bloomberg.com
Published on April 6, 2025
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