Workers' Party disappointed with US tariff, calls to strengthen trade relations within Asean & others

The Workers' Party has released a statement on Facebook on Apr. 8 stating its disappointment with the 10 per cent baseline tariff rate U.S. President Donald Trump has imposed on Singapore, adding that it is particularly concerned about the effects of the tariffs on Singapore businesses and employment.

The party called for redundancy insurance and mandatory retrenchment benefits for workers, as well as strengthening Singapore's regional trade relationships, both within and outside of Asean.

Earlier this afternoon, PM Wong delivered a ministerial statement in parliament, where he said Singapore was "very disappointed by the U.S. move, especially considering the deep and long-standing friendship between [the] two countries".

Singapore was hit with a 10 per cent tariff, despite an existing free-trade agreement intended to eliminate customs duties on imports from either country.

The act adversely affects bilateral ties Singapore has with the U.S.

The Workers' Party said that the unilateral act adversely affects the bilateral ties that Singapore currently enjoys with the U.S., with the latter being "one of Singapore’s major trading partners, and its largest foreign direct investor".

"As a small, open economy that is heavily dependent on international linkages, Singapore’s economy will inevitably be affected," the party said, noting it would be the case especially for workers in Singapore's outward-facing sectors of the economy: trade, finance, and tourism.

"Our internationalised businesses—especially those based in countries that are facing a potentially higher rate of US tariffs than here—would be more adversely affected, too," it added.

The party noted that the Ministry of Trade & Industry has indicated that it will be reassessing the nation's 2025 growth forecast, which is currently between two and three per cent.

Commence bilateral negotiations, tap into existing ties

Saying that it believes a rational and pragmatic approach is required to deal with the unfolding situation at both the international and domestic levels, the Workers' Party added that the Singapore government should immediately commence bilateral negotiations.

The party said that the government should also tap into its existing ties with other branches of the US government and business associations, such as the Congressional Singapore Caucus and the American Chamber of Commerce, to argue its case.

They also suggest taking advantage of the Association of Southeast Asian Nations (Asean)’s combined economy, as well as further strengthen Singapore's regional trade relationships, both within Asean, as well as larger trade blocs of which it is part, such as the Regional Comprehensive Economic Partnership (RCEP) or Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).

Since the 10 per cent tariffs imposed on Singapore are lower than regional competitors like Taiwan, South Korea and Malaysia, which face tariffs ranging from 24 per cent to 32 per cent, the party noted it could present a near-term cost advantage for Singapore firms exporting semiconductors, telecoms equipment and electronics to the US, relative to exports from these higher-tariff countries.

"Our economic agencies should step up efforts to help Singapore firms seize these opportunities as they arise," they said.

Support involuntarily unemployed workers, bolster economic resilience of Singapore's domestic industries

The party also noted that redundancy insurance and mandatory retrenchment benefits should be put in place so involuntarily unemployed workers will receive the support they need, especially those affected by trade-related displacement.

The Workers' Party said their MPs have offered various proposals to strengthen the circumstances of Singapore's workers, including refining retraining and reskilling programmes, banning noncompetes in employment contracts for low- and mid-level employees, protecting workers from "predatory employment contracts", and uplifting Singapore's lowest-income workers with a statutory, universal minimum wage.

It also noted the need to bolster the economic resilience of Singapore's domestic industries and said establishing an export-import bank can provide crucial trade financing to exporters and importers.

"Our small and medium-sized enterprises (SMEs) that experience trade shocks will also benefit from transition support, akin to what was provided during the Covid-19 pandemic. And setting up a secretariat, catering specifically for SMEs, will ensure that any assistance rendered is tailored, targeted, and coordinated," the party said.

"The strength of our nation has always been unity in diversity, and this must include an openness to rational and responsible policy, proposed along all political quarters," said the Workers' Party, adding:

"It is only through welcoming such diversity of ideas that we will emerge stronger through the storm."

You can read the full statement here:

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Top image via Canva and The Workers' Party/Facebook