Gan Kim Yong's in the US for trade talks, ahead of Trump's Aug. 1 tariff deadline

Deputy Prime Minister and Trade and Industry Minister Gan Kim Yong is in the U.S. for trade talks, ahead of the tariff deadline of Aug. 1 set by U.S. President Donald Trump.

In recent weeks, various Asean countries have either announced new deals with the U.S., or had their deals announced by President Trump with some fanfare on his Truth Social account.

These include Vietnam, Indonesia and the Philippines, all of whom saw a reduction in the tariff rates that the U.S. initially imposed on their exports to the U.S.

Further afield, Japan also announced a trade deal that saw their tariff rate cut from 25 to 15 per cent.

However, in order to gain such reductions, these countries have made startling concessions previously thought untenable.

Japan has opened up its market to rice exports from the U.S., which has long been guarded due to the political influence of rice farmers in Japan.

Despite previously saying that lifting tariffs on U.S. exports would hurt domestic businesses, the Philippines has agreed to lift their own tariffs on exports from the U.S. in the automotive sector.

Countries have also pledged to make massive investments in the U.S., with Japan promising an investment of over S$700 billion and Indonesia promising to buy 50 jets from Boeing, a U.S. manufacturer.

Singapore's situation

Singapore received among the lowest tariff rates announced by Trump on his so-called "Liberation Day" of 10 per cent.

However, Singapore is alone in Southeast Asia to have a trade deficit with the U.S., buying more U.S. goods than exporting to America.

Singapore also signed a Free Trade Agreement with the U.S., in force since Jan. 1, 2004.

But that may count for naught, as a recent Trump statement hinted that the tariff rate on Singapore may even rise to 15 per cent.

At an AI summit on Jul. 23, Trump commented that the U.S. would impose a "straight simple tariff of anywhere between 15 and 50 per cent," Bloomberg reported.

This is 5 per cent more than the so-called "baseline" rate of 10 per cent previously imposed.

While certain countries have received letters from the White House informing them to either cut a deal or face hiked tariffs, Gan said that as of Jul. 10, Singapore had not.

Speaking in a press conference of the Special Economic Resilience Taskforce then, Gan said that Singaporeans need to be prepared for a a period of uncertainty.

DPM Gan in the US

Gan is on a trip that started on Jul. 20 and lasting till Jul. 26.

While there, he is scheduled to meet members of Congress and the Trump Cabinet.

While the government press release did not mention the state of tariff talks, it wouldn't be a stretch to assume that Gan's work in the U.S. would relate to what has become Trump's signature economic policy.

Thus far, no Asian country has announced a tariff rate of below 15 per cent following a deal with the Trump Administration.

According to Nikkei Asia, Singapore is also pushing for concessions in the pharmaceutical sector, while Bloomberg mentions "pharmaceutical supply chain issues" as a key topic of discussion between Gan and U.S. officials.

Pharmaceuticals make up about 10 per cent of Singapore's total exports to the U.S., worth about S$12 billion.

Manufacturing companies with plants in Singapore include Pfizer Inc., Amgen Inc. and Merck & Co.

Tight-lipped on negotiations so far

Singaporean politicians and officials have been tight-lipped on what we may expect from the Americans, as the Aug. 1 deadline approaches.

Prime Minister Lawrence Wong emphasised Gan's work in tackling international issues, particularly the trade war.

Given our trade deficit and the fact that we already impose near zero to zero tariffs on U.S. exports to Singapore, DPM Gan and his team will require all the negotiating skills to work towards a "mutually beneficial Singapore-US relationship".

Top image via MTI.