'There are no winners': Gan Kim Yong on how Trump tariffs impact S'pore beyond direct 10%

On Apr. 3, Singapore woke up to the news that the U.S. imposed a 10 per cent tariff on all imports, along with tariffs on virtually every other country in the world.

Singapore is one of a few countries that got hit with the so-called "base rate" tariff of 10 per cent, along with countries like Saudi Arabia, Australia and Turkey.

But while Singapore may appear to be in a better position than say Cambodia, which had a 49 per cent tariff, our economy will ultimately be negatively affected as the tariffs impact economic activity elsewhere.

Indirect impact

"I wouldn't say we have a 'better deal' than other countries, because no country likes to have customs duties imposed on their exports," said Deputy Prime Minister Gan Kim Yong.

Gan, who is the Minister for Trade & Industry, explained that Singapore is part of an integrated trade system.

What affects one country ultimately affects everyone else.

For Singapore, the immediate impact is of course the 10 per cent tariff imposed on direct Singaporean exports to the U.S.

But since other countries have also been slapped with tariffs, they will slow down their production and economic activity, as the tariffs create price hikes for consumers in the U.S. that will depress consumer demand.

Once this happens, investments in those countries normally exporting to the U.S. will go down.

With imports, exports, investment and trade all slowing down globally, this leads to a global economic slowdown.

Singapore, as an open economy dependent on global growth, will not be spared.

"No one will benefit from this exercise," Gan said.

He also predicted an overall rise in prices for goods and services, as when a country imposes tariffs and they get hit by retaliatory tariffs in turn, the cost of production goes up and overall, "someone will have to pay" for these additional tariffs.

Singapore will try to engage the U.S. at multiple levels

Gan said that Singapore will try to engage the U.S. at multiple levels to understand President Donald Trump's areas of concern and see if they can be resolved.

"We'll be engaging at the ministerial level, at the official level. Ambassadors in the US will also be engaging them, and our businessmen will also be engaging their private sector," said Gan.

Top image via Mothership and Canva.