Can Singapore outsmart US tariffs? Experts reveal the impact and best options moving forward

The Stakes: A Trade Giant Under Threat

Singapore’s economy thrives on its role as a global trade hub, exporting semiconductors, pharmaceuticals, and more. In 2024, its goods trade with the US reached US$89 billion, with US$46 billion flowing to American shores. The tariffs, effective April 5, 2025, now jeopardize this lifeline, hitting a nation that’s long defied its size.

Chua Hak Bin, co-head of macro research at Maybank, sounds the alarm. In a Straits Times interview, he predicted a “massive deflationary shock to demand and trade,” with manufacturing and exports poised to shrink. He’s especially wary of extra tariffs looming over electronics and pharmaceuticals—pillars of Singapore’s economy.

Jester Koh, an associate economist at UOB, tempers the gloom but sees risks. Writing for Channel News Asia, he suggested the USSFTA and Singapore’s trade deficit with the US offer some buffer, yet “unemployment could edge up” as global trade falters. The indirect ripples, he warns, may sting more than the tariffs themselves.

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Government’s Response: Dialogue Over Retaliation

Singapore’s leadership isn’t rushing to retaliate. Trade Minister Gan Kim Yong labeled the tariffs a violation of the USSFTA’s spirit but ruled out tit-for-tat measures in a press statement, noting they’d only “add cost to our imports.” The focus? Diplomacy—engaging US officials to negotiate and clarify.

Prime Minister Lawrence Wong took a darker view. Speaking to Channel News Asia, he cautioned that Singapore risks being “squeezed out, marginalised, and left behind” if trade tensions escalate. His call to action: prepare for worse.

Domestically, the government is mobilizing. Plans include pushing firms toward new markets, strengthening digital and green economy ties, and boosting training and R&D support—aiming to keep businesses resilient amid the tariff squeeze.

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Expert Strategies: Reinventing the Game Plan

Beyond government moves, experts propose bold shifts to shield Singapore from this and future trade disruptions. Their recommendations:

Shift Inward: Build Domestic Strength

Public policy expert Donald Low sees a chance to rethink Singapore’s export fixation. In The Online Citizen, he urged the nation to “boost domestic demand and rethink investments.” His vision: grow service industries and foster a more self-sufficient economy—a radical pivot for a trade-driven state.

Target New Markets

Manu Bhaskaran, CEO of Centennial Asia Advisors, advocates diversification. In The Business Times, he pushed businesses to “expand export markets to mitigate the impact,” while advising caution on hiring and big investments until clarity emerges—a pragmatic hold-the-line approach.

Strengthen ASEAN Ties

Trade analysts highlight regional resilience. A DBS report touted “greater intra-ASEAN collaboration” as a shield, pointing to initiatives like the Johor-Singapore Special Economic Zone as growth drivers to offset US losses.

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The Catch: No Easy Fixes

These strategies carry trade-offs. Low’s domestic push could diversify Singapore’s economy, but Chua Hak Bin told The Straits Times it’s “challenging” to rewire a trade-centric model fast. New markets sound appealing—OCBC’s Selena Ling noted in AsiaOne that Singapore’s 10% tariff beats Vietnam’s 46% or Thailand’s 36%—but she cautioned the benefits are “not easily quantifiable” amid a potential global downturn. ASEAN unity? Promising, but Vietnam and Malaysia’s higher tariffs could drag the region down together.

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Ground-Level Impact: Prices and Jobs Hit

The tariffs will reach beyond boardrooms into daily life. An American Chamber of Commerce survey in Singapore found 45% of firms plan price hikes, with 69% expecting moderate to severe impacts. Consumer goods—think smartphones—could see markups as supply chains strain.

Jobs face pressure too. Multinational slowdowns may stall hiring or investment, and analysts in The Straits Times foresee “fewer job opportunities,” hitting new graduates hardest as the economy tightens.

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A Glimmer of Hope: Singapore’s Edge

Not all is bleak. Barnabas Gan of RHB Bank told Channel News Asia that Singapore may take the “least of the brunt” due to the USSFTA and its modest 10% tariff rate. Trade rerouting could even steer business its way.

Yet optimism has limits. Mansoor Mohi-uddin, chief economist at the Bank of Singapore, admitted to Channel News Asia that the tariffs’ rapid rollout caught him off-guard. If China’s supply chains—crucial to Asia—buckle, “Singapore’s pain could deepen,” he warned. A 10% advantage might not hold if global trade collapses.

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Looking Ahead: Adapt or Sink

Can Singapore outsmart the tariffs? Experts say it’s possible—with agility and resolve. Diversifying markets, bolstering domestic demand, and leaning on ASEAN could soften the blow. But time is short, and the stakes are high. A broader trade war or sustained global slump could stretch even Singapore’s vaunted adaptability.

Prime Minister Wong’s words echo: Singapore must “brace itself for more shocks.” Its strengths—a top-tier port, trade agreements, and nimble governance—provide leverage. Yet, as Chua, Koh, and Low emphasize, complacency isn’t an option.

For Singaporeans, this is personal: higher costs, slimmer job prospects, and a nation at a tipping point. The tariff chapter’s just begun—stay alert.