While Singapore appears unlikely to face direct tariffs from the United States, its small and open economy could be “caught in the crossfire” of a trade war between the superpowers, analysts have warned.
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Those who spoke to This Week in Asia agreed with Foreign Minister Vivian Balakrishnan’s assessment in Parliament on Tuesday that while Singapore was unlikely to be on the US tariff “hit list” due to Washington’s trade surplus with the city state, it would still be indirectly affected.
“Even if you assume that there are no direct tariffs against the export of Singapore products and services, the fact that we are a small, open economy, and trade constitutes more than three times our GDP, means if there is any friction, degradation of economic integration, global supply chains, and world trade, we will be impacted indirectly,” Balakrishnan said.
Urging parliamentarians to remain calm, he added: “I do need to prepare Singaporeans that it will be a turbulent ride in the months or years to come.”
Two-way trade between Singapore and the US totalled US$131 billion in 2023, with the world’s largest economy recording a surplus of US$26.7 billion, according to the American Chamber of Commerce in Singapore.
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Alvin Liew, senior economist at United Overseas Bank, warned that escalating trade tensions and tariffs could hurt economic growth in the US, China and Asean. He said Singapore was vulnerable to downturns in these economies, as well as in the European Union.