Trump tariffs: Prepare for rough weather, say SM Lee, Vivian, but PM Wong ready to help households & businesses

The U.S.'s Trump administration has imposed the baseline tariff rate of 10 per cent on Singapore.

Tan Min-Wei

April 04, 2025, 12:13 AM

Early on Apr. 3 (Singapore time), United States President Donald Trump imposed sweeping new tariffs on all imports to America, on friends and rivals alike.

While some countries like China ended up with an effective tariff rate of 54 per cent, the U.S. imposed a baseline rate of 10 per cent on Singapore.

Deputy Prime Minister and Minister for Trade & Industry, Gan Kim Yong, spoke on the government's reaction to the tariff announcement.

He expressed disappointment at Singapore being hit with tariffs, despite the U.S. enjoying a trade surplus with Singapore and the over two-decade-old U.S. - Singapore Free Trade Agreement.

He said that "there are no winners"; but that Singapore would not take retaliatory action against the tariffs and that the Singaporean government would instead engage with their U.S. colleagues to understand what their concerns were.

Sweeping measures

This sentiment was echoed by both Senior Minister Lee Hsien Loong and Foreign Minister Vivian Balakrishnan.

SM Lee described the U.S.'s measures as "sweeping" and said that they would "seriously impact" international trade, the global economy, as well as Singapore.

Reiterating that Singapore would not take retaliatory action, SM Lee nonetheless warned that "many countries are bound to do so", which might in turn "trigger an escalating vicious cycle of higher tariffs".

This might lead to a trade war, which "would drive up costs, choke off trade, and dampen economic growth for everyone".

The Ministry of Trade & Industry will be reassessing Singapore's 2025 growth forecast, which is currently between one and three per cent.

SM Lee predicted that Singapore's growth would be hurt, although he said that it was too early to tell by how much.

"Singaporeans and businesses should be psychologically prepared for rough weather ahead."

SM Lee said that for the moment, the recent Budget 2025's measures "provide adequate support".

However, Prime Minister Lawrence Wong and his team will "continue to monitor developments closely" and stand ready to "intervene to help households and businesses if necessary".

Turning point, USA

Foreign minister Vivian Balakrishnan described the news as "a profound turning point", calling it a "major setback to 80 years of global economic integration".

Vivian acknowledged that Singapore faces the baseline tariffs of 10 per cent.

But he warned that it was the "wider impact of much higher reciprocal tariffs elsewhere" as well as the risk of retaliatory tariffs might lead to a global trade war that would profoundly impact Singapore as a major trade hub and financial centre.

Echoing both SM Lee and DPM Gan, Vivian warned: "So we need to be prepared for stormy weather."

Singapore will not impose retaliatory measures as "these will only raise costs for households and businesses here."

Instead, the foreign minister said, Singapore would "engage the Trump administration to better understand their concerns and work constructively to find a mutually beneficial solution."