US tariffs will significantly impact Singapore’s growth; Budget 2025 to help in short term: PM Wong

SINGAPORE – The recent tariffs imposed by the United States will hurt the Singapore economy, businesses and workers, said Prime Minister Lawrence Wong.

“Singapore may or may not go into recession this year. But I have no doubt that our growth will be significantly impacted,” he said.

Budget 2025 measures will

provide short-term support

and a new task force will help address immediate uncertainties while the Government continues to monitor the situation, PM Wong added.

But in the near term, global growth is expected to be weaker, which means external demand for Singapore’s goods and services will fall, he pointed out.

Outward-oriented sectors – like manufacturing, wholesale trade and transport – will bear the brunt of the impact.

PM Wong, who is also Finance Minister, said in Parliament on April 8: “Slower growth will mean fewer job opportunities and smaller wage increases for workers. And if more companies face difficulties or relocate their operations back to the US, there will be higher retrenchments and job losses.”

The Trade and Industry Ministry, which had originally

projected gross domestic product growth of 1 per cent to 3 per cent

for 2025, is reassessing “and will likely revise it downwards”, PM Wong said.

He was delivering a ministerial statement in response to US President Donald Trump’s April 2

announcement of a suite of universal tariffs,

including a 10 per cent duty on Singapore. The measures will kick in on April 9.

The Government is continuing to monitor developments closely and stands ready to do more, if and when necessary, PM Wong said.

“We have the resources to do so because of the financial discipline and prudence we’ve exercised over the decades.”

The new task force,

chaired by Deputy Prime Minister Gan Kim Yong, will aim to help businesses and workers address the immediate uncertainties, strengthen their resilience, and better adapt to the new economic environment, PM Wong announced.

It will comprise the economic agencies as well as the Singapore Business Federation, Singapore National Employers Federation and the National Trades Union Congress.

For now,

the measures announced in Budget 2025

will provide support for any short-term strain.

These include CDC vouchers, SG60 vouchers and U-Save rebates that help with cost-of-living concerns, while targeted measures like increased ComCare assistance will support the more vulnerable groups.

Workers can also tap SkillsFuture, while the involuntarily unemployed will receive help to get back on their feet through the SkillsFuture Jobseeker Support scheme that will be rolled out later in April, said PM Wong.

The Budget also had various measures to help businesses, including

corporate income tax rebates

as well as schemes to boost productivity and competitiveness, and to help with pivoting to new markets.

“Our economic agencies are also engaging the firms impacted by the tariffs to better understand their responses, and see how we can support them, and assist them with any specific issues they face,” he said.

But the situation remains fluid and can change quickly, added PM Wong.

In the new environment, Singapore must redouble its efforts to remain a key node in global flows and a trusted business hub, he said.

The country will forge closer ties with like-minded partners that share its commitment to open and free trade.

“The US may have decided to turn protectionist. But the rest of the world does not have to follow the same path,” said PM Wong.

“We will identify other partners to join us and work around this – to ensure resilience and maintain critical parts of the multilateral system, while laying the foundations for a possible new and different global system that can be achievable later.”

PM Wong said this was why he had made the effort to engage and visit his counterparts in different countries over the past year.

He had spoken to British Prime Minister Keir Starmer on April 7, and has more conversations lined up in the coming weeks.

“They are all keen to do more with Singapore and to expand our economic cooperation, including in new areas like the digital and green economies,” he said.

“In particular, we will strengthen our collaboration and integration within Asean,” said PM Wong, adding that he had spoken to Malaysian Prime Minister Anwar Ibrahim on April 4.

A Special Asean Economic Ministers’ Meeting will be convened later in the week to discuss further ways for the regional grouping to work together to strengthen trade within the bloc, and send a strong signal of its commitment to regional economic integration, he added.

PM Wong also pointed out that if the tariffs were truly meant to be reciprocal, and meant to target only those with bilateral surpluses, the tariff for Singapore should be zero.

With the free trade agreement between Singapore and the US, the Republic imposes zero tariffs on US imports, and actually runs a trade deficit with the US. This means that Singapore buys more from the US than it does from Singapore.

“We are very disappointed by the US’ move, especially considering the deep and longstanding friendship between our two countries. These are not actions one does to a friend,” he said.

PM Wong also laid out the impact of the tariffs on the broader global economy.

“We are entering a new phase in global affairs – one that is more arbitrary, protectionist and dangerous,” he said.

Asia also bears the brunt of the US tariff increases, with China being the hardest hit, with a 34 per cent tariff.

This is on top of the 20 per cent tariff increase imposed over the past two months, and the 20 per cent from the first Trump administration.

Taken together, the average US tariff on Chinese products now exceeds 60 per cent, noted PM Wong.

The South-east Asian countries are facing tariffs of between 10 per cent and 49 per cent.

“These measures will accelerate the fracturing of the global economy,” he said.

“Instead of flowing based on economic efficiency, capital and trade will increasingly be diverted based on political alignment and strategic considerations.”

These “reciprocal” tariffs are a fundamental rejection of World Trade Organisation rules, said PM Wong.

The likelihood of a full-blown global trade war is also growing, he added.

Business and consumer confidence has already been hit by the tariffs, and international trade and investments will suffer, said PM Wong.

Multinational enterprises and local businesses here are worried about weakening demand, and some have put new projects on hold while they assess the impact of the tariffs, he added.

The US-China relationship is also a major concern.

“If the disputes escalate and destabilise the US-China relationship, the consequences for the world would be disastrous,” said PM Wong.

“The new era will be more volatile, with more frequent and unpredictable shocks. We must be ready to stand firm, and protect our interests, no matter how the external winds may blow,” he added.

The only way Singapore can make it through the gathering storm is to stay united – by pooling resources, resilience and resolve.

“The Government will do everything we can to steer Singapore through the choppy waters, and make sure no one is left behind,” said PM Wong.

It will keep the economy open, society cohesive and institutions strong, while creating new value propositions for investors and businesses.

“We will act boldly and decisively, when needed, to ensure Singapore continues to succeed. Above all, we will put the interests of Singapore and Singaporeans at the centre of everything we do,” he said.

Singapore has deep reserves built as a strategic buffer, and there is a strong compact, built on solidarity and trust in one another, he added.

Said PM Wong: “Do not fear. Now, more than ever, we will stay resolute and united.

“Our little red dot will continue to shine. In a dark and troubled world, Singapore will hold our ground as a beacon of stability, purpose and hope.”