Singapore will have to carefully assess any action aimed at easing US tariff rates: DPM Gan

SINGAPORE – Singapore will continue to engage the US on lowering tariffs and help businesses and workers adapt, but will consider any steps carefully in response to the negotiations, said Deputy Prime Minister Gan Kim Yong.

About a third of Singapore’s domestic exports to the US – worth about $9.5 billion annually – became subject to a 12.5 per cent tariff on July 24, along with dozens of other economies coming under 10 per cent or 12.5 per cent duties amid US allegations of forced labour.

DPM Gan said there is no evidence that Singapore is involved in the trade of goods associated with forced labour, but the higher rate was imposed because it lacks a law prohibiting the importation of goods produced with forced labour.

Singapore has also not negotiated an Agreement on Reciprocal Trade (ART) with the US, which could have included such prohibitions along with other trade restrictions.

As a major trading hub with around $2.5 trillion in goods and services trade each year, including $1.4 trillion in goods, any import prohibition would have significant implications for Singapore’s trade, Gan said.

“Businesses could face substantial compliance costs arising from supply-chain due diligence, documentation, and investigations, particularly where production takes place outside Singapore and beyond our jurisdiction,” he said in a written reply to a parliamentary question on Sept 8.

“Such measures could also affect our broader trade relationship with other partners,” added Gan, who is also the Minister for Trade and Industry (Trade).

He cited a July 24 statement from the Singapore Business Federation, which also noted that any new regulatory requirements should be carefully studied in consultation with industry.

Gan said the Government will continue discussions with businesses and workers through the Singapore Economic Resilience Taskforce (SERT).

The Government has also considered an ART with the US to lower tariffs. However, based on agreements the US has concluded with other economies, such arrangements may involve commitments beyond an import prohibition, including export controls or restrictions relating to third countries.

“These wider implications have to be assessed carefully before Singapore decides on any course of action,” Gan said.

He said the Government’s immediate priority is to help businesses and workers adjust to higher costs and disruptions in trade flows associated with the tariffs.

He added that while the impact of the US tariff on the economy has been muted so far, the SERT has been working closely with workers and industry partners to monitor the impact and help them adapt.

For instance, the Business Adaptation Grant launched in October 2025, supports eligible enterprises in redesigning their business operations and strengthening supply chain resilience.

The 2026 Budget also provides more grant support under schemes such as the Market Readiness Assistance grant to help firms diversify and grow in overseas markets.

Singapore has engaged the Office of the US Trade Representative (USTR) actively at both the political and official levels, including during Gan’s visit to the US in August and via written comments to the USTR and bilateral government consultations.

The Republic and the US are major trade and investment partners. In 2025, goods trade between the US and Singapore amounted to $139.2 billion. Singapore was the US’ third-largest Asian investor with about US$53 billion in foreign direct investment (FDI) stock in 2025, while the US was Singapore’s largest investor with $778.6 billion in FDI stock in 2024.

Bilateral trade and Singapore’s investments support around 350,000 jobs in the US.