Trump's announcement of 100% tariffs on pharmaceutical products of 'significant concern' to S'pore: Gan Kim Yong

U.S. President Donald Trump's announcement of 100 per cent tariffs on pharmaceutical products is of "significant concern" to Singapore, Trade and Industry Minister Gan Kim Yong said on Sep. 27.

Speaking to the media, Gan highlighted that Singapore's pharmaceutical exports to the U.S. amount to about S$4 billion.

This is about 13 per cent of Singapore's domestic exports to the U.S., and about 19 per cent of Singapore's overall pharmaceutical domestic exports, so it's an "important component of our trade", Gan added.

Government has been engaging with pharmaceutical companies

The government has thus been engaging with pharmaceutical companies in light of the tariffs announcement.

"In fact, even before the announcement, we have been talking to them because we know that pharmaceutical tariffs are impending, to better understand their concerns and their situation with regard to their exports to the U.S.," Gan pointed out.

The minister also noted a provision in the tariffs which states that there will be an exemption if a company is building a manufacturing plant in the U.S., and that many of the pharmaceutical companies do have plans to do so.

"So tariffs may not have an immediate impact on their exports," he said.

In the meantime, the companies are continuing to clarify with the U.S. administration to better understand the conditions and criteria of the tariffs.

This includes understanding whether they are eligible for exemption from the tariffs with plans for the plants in place.

Trade talks with the U.S. ongoing

Trade talks between Singapore and the U.S. are also still ongoing, according to Gan.

Following his meeting with U.S. Commerce Secretary Howard Lutnik on Aug. 19, officials from both sides have been working out details, exchanging information and understanding information.

Gan said his engagement with Lutnik is also continuing.

However, the negotiation will take time as many details remain to be worked out and an update will be given at the "appropriate time", he added.

The objective of the talks is to allow Singapore to remain competitive in the U.S. market, he said.

"As to whether the tariff rate will be 15 per cent or any other tariff is something that is as part and parcel of the negotiation. But we do look forward to having some preferential treatment," Gan noted.

Currently, Singapore is subject to the baseline tariff rate of 10 per cent.

Various types of furniture have also been subjected to tariffs

Beyond pharmaceuticals, the U.S. has also imposed tariffs on items such as kitchen cabinets, bathroom vanities and upholstered furniture.

The government has therefore also reached out to the companies which are involved in exporting these items to better understand the impact and to see how help can be provided, if necessary, Gan said.

Beyond these, the government's concern is the broader perspective of how new tariffs will be introduced from time to time.

Gan said:

"I think in time to come, other countries will also begin to have to introduce tariffs to protect their own industries. So I think this is going to be a new normal. So it's not going to be a passing stop, it's going to be here to stay.

So I think we have to understand the new world that we are facing, and therefore we have to reorganise ourselves, strengthen our resilience and competitiveness, so that we can be relevant in the global economy in the long term."

Left photo by Mothership, right photo via Donald Trump/Facebook