US tariffs on Singapore disappointing; situation needs rational, pragmatic approach: WP

SINGAPORE – The move by US President Donald Trump to impose a blanket tariff rate of 10 per cent on Singapore is disappointing, said the opposition Workers’ Party.

What is needed is a rational and pragmatic approach to deal with the unfolding situation, at both the international and domestic level, it added.

In a statement on Facebook on April 8, the WP said

unilateral sanctions imposed on Singapore by the US

adversely affect bilateral ties, and no response should be ruled out.

It added that while the Government exercises restraint in reacting to US tariffs, it should immediately start bilateral talks.

The WP said: “We believe that no response should be ruled out, given the unprecedented nature of the act.

“Singapore must reserve its right to turn to relevant dispute settlement mechanisms, such as those outlined in the US-Singapore Free Trade Agreement or the World Trade Organisation.”

Singapore should also tap its existing ties with other branches of the US government and business associations to argue its case, it added.

It must also take advantage of the combined Asean economy to negotiate collectively with the US to increase relevance and leverage, the WP said.

Singapore must also further strengthen regional trade ties within Asean as well as larger trade blocs of which it is part of, such as the Regional Comprehensive Economic Partnership or Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

“This will provide the necessary ballast to forgone trade with the US, while also signalling our continued commitment to an open global trading regime,” the WP said.

Since Singapore’s tariffs are lower than those on regional competitors like Taiwan, South Korea and Malaysia, the situation could present a near-term cost advantage for local firms exporting semiconductors, telecoms equipment and electronics to the US, it added.

“Our economic agencies should step up efforts to help Singapore firms seize these opportunities as they arise.”

On April 2, Mr Trump said the tariffs will kick in on April 9,

starting with a baseline tariff of 10 per cent globally, and higher rates for many Asian countries.

The Trade and Industry Ministry has said

it will be reassessing Singapore’s 2025 growth forecast,

the WP said.

It added that a worsening economic outlook or even a recession will adversely affect employment and tariffs may reignite inflationary pressures, which could worsen the already-high cost of living.

A key concern is the effect the tariffs will have on Singapore businesses and employment.

The WP said: “Even though Singapore faces only the lowest-tier increase in tariffs, the latest act has undeniably upended the global trade compact that was first established at the conclusion of World War II, with the General Agreement on Tariffs and Trade and, thereafter, the World Trade Organisation.

“Retaliation efforts are also unfolding, sparking fears of an escalating global trade war. There is a sense of increasing uncertainty over the international economic landscape.”

As a small, open economy that is heavily dependent on international linkages, Singapore’s economy will inevitably be affected, it said.

This is especially the case for workers in outward-facing sectors of the economy: trade, finance and tourism.

The WP highlighted its domestic policy suggestions to improve the resilience of Singapore’s economy and workers.

For instance, redundancy insurance as well as mandatory retrenchment benefits need to be in place so displaced workers will receive the support they need, it said.

It added that its MPs have also offered proposals to strengthen workers’ circumstances, including refining and better targeting retraining programmes, and uplifting the lowest-income workers with a universal minimum wage.

“These policies are even more pressing today, in a time of heightened uncertainty,” it said.

The WP added it also believes in bolstering the economic resilience of domestic industries to ensure they remain viable and can employ workers.

It detailed policy moves such as establishing an export-import bank to provide trade financing, and setting up a secretariat catering to small and medium-sized enterprises to help navigate trade shocks.

The WP said: “Singapore will have to remain nimble and fleet-footed as it navigates this turbulent period, and Singaporeans must remain united and row in the same direction.

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

Earlier on April 8, Prime Minister Lawrence Wong delivered a ministerial statement on the tariffs, where he said Singapore’s growth will be significantly impacted.

PM Wong, who is also Finance Minister, added that in the near term, global growth is expected to be weaker, which means external demand for Singapore’s goods and services will fall.

WP MPs also took part in the debate.