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In a tariff war, services will be hit as well
US President Donald Trump’s tariffs are focused on goods, but the bundling of goods with services and supply chain shifts will affect the services sector.
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The US Travel Association estimates that even a 10 per cent reduction in travel from Canada would lead to industry losses of more than US$2 billion and cost up to 140,000 jobs.
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So far, most discussions on trade have been focused on trade in goods. Surprisingly little has been said about services, which are not only often closely linked with goods but are also more important for many countries, including Singapore.
The services sector, which encompasses everything that does not come from a factory, a farm or from under the ground and includes industries such as healthcare, finance, IT, education, tourism, logistics and entertainment, accounts for more than two-thirds of the global economy. As with most other advanced economies, more than 70 per cent of Singapore’s GDP comes from the services sector, which employs more than 80 per cent of the workforce.
