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'I do not anticipate us being on the hit list for direct tariffs': Vivian Balakrishnan addresses U.S. tariffs

"I do need to prepare Singaporeans that it will be a turbulent ride in the months or years to come," Vivian said.

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February 05, 2025, 10:27 AM

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Since taking office on Jan. 25, 2025, United States (U.S.) President Donald Trump has wasted little time in demonstrating his love of tariffs, which he once called "the most beautiful word in the dictionary".

On Feb. 1, Trump imposed 25 per cent tariffs on Canada and Mexico, and a 10 per cent tariff on China, in a bid to stop the flow of fentanyl and migrants into the U.S.

While Trump has since walked back his tariffs on Canada and Mexico, his tariff on China remains in effect. China, in turn, has imposed retaliatory tariffs on the import of U.S. goods.

Leaders around the world, including members of the European Union (EU), are bracing themselves for the possibility of American tariffs.

As Trump fires the opening salvoes of what some have dubbed the "dumbest trade war in history", could Singapore be up next?

Minister for Foreign Affairs Vivian Balakrishnan wagers that Singapore is safe from such direct tariffs, given our favourable trade conditions with the U.S.:

"Going forward, I will take some risk and say that I do not anticipate us being on the hit list for direct tariffs, because, as I said earlier in my answer, the U.S. has a surplus, as far as the trade balance with us is concerned."

All the same, Vivian expressed concerns that "friction" in the world trade system, resulting from tariffs and a possible trade war, could have knock-on effects on Singapore.

Vivian made the remarks in parliament on Feb. 4, 2025, when addressing questions by Nominated Member of Parliament (NMP) Neil Parekh Nimil Rajnikant on U.S.-Singapore bilateral ties under the Trump administration.

A 60-year-old partnership

Vivian noted that Singapore and the U.S. have had a long and storied relationship, stretching across bipartisan lines:

"Singapore and the United States enjoy a substantive, multi-faceted and a very long-standing partnership.

The fundamentals of this mutually beneficial relationship has been nurtured across both Democratic and Republican administrations over the past 60 years."

Vivian, for instance, highlighted a striking statistic about the extent of U.S. investment in Singapore:

"The U.S. has invested more in Singapore than it has invested in India, China, Japan, Korea combined."

These investments have led to more than 6,000 U.S. firms based in Singapore. Vivian added that Singapore is also the third largest Asian investor in the U.S., with some 200 Singapore companies in 40 states.

"Bilateral trade and investments between the U.S. and Singapore generate over 350,000 jobs in the U.S.," Vivian said.

Vivian also pointed out how both countries have "institutionalised cooperation" in areas like space, critical and emerging technologies, and nuclear energy.

Liberal world order being eroded

Vivian, however, expressed concerns that the world order that had undergirded this 60-year-old partnership between the U.S. and Singapore thus far was being eroded: 

"But the world is now at a new inflection point, probably at a point which we have not faced for almost a century.

The liberal world order that prevailed after the Second World War...which, in fact, has been quite conducive for Singapore's progress in the last 60 years, that liberal world order is now being eroded."

Vivian, in particular, noted strains in the relationship between the U.S. and China, which he viewed as critical to "global stability and prosperity".

Vivian said:

"I would characterise it as a significant lack of strategic trust between these two super powers, and we are all witnessing bifurcation, a decoupling of the global economy as a result of that."

The challenge for Singapore and Southeast Asia is how it will respond to these contingencies, Vivian said.

"We believe there needs to be an omnidirectional engagement on our part with all the multiple poles of power that are emerging," Vivian said, referring to Singapore's "intensive diplomacy and economic engagement across the world".

A turbulent ride ahead

Though Vivian believes that Singapore is not at risk of direct tariffs from Trump, it can still be affected by any such disruptions to world trade:

"...the fact that we are a small, open economy, and that trade constitutes more than three times our GDP, means if there is any friction, if there is any degradation of economic integration, global supply chains and world trade, we will be impacted indirectly."

"I do need to prepare Singaporeans that it will be a turbulent ride in the months or years to come," he added.

Top photo from MDDI/YouTube & Donald Trump/Facebook. 

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