Singapore forms task force to support businesses against impact of US tariffs

“These tariffs may just be the beginning of more increases to come globally,” Wong said.

Singapore is setting up a national task force to support businesses and workers affected by sweeping US tariffs that could slow economic growth and impact jobs and wages, Prime Minister Lawrence Wong said in Parliament on Tuesday.

The task force, chaired by Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong, will include representatives from the city-state’s economic agencies, the Singapore Business Federation, the Singapore National Employers Federation, and the National Trades Union Congress.

Describing the global situation as “fluid”, PM Wong said in a ministerial statement that the task force will help businesses and workers address immediate uncertainties, strengthen resilience, and adapt to a new economic landscape.

The tariffs are expected to dampen global growth in the near term, affecting external demand for Singapore’s export-reliant sectors such as manufacturing and wholesale trade. The global uncertainty and weakened sentiment will also impact service industries, including finance and insurance, said Wong, who is also the finance minister.

The Ministry of Trade and Industry is reviewing its 2025 growth forecast of 1 to 3 percent, with a likely downward revision. “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,” Channel News Asia quoted Wong as saying.

Beyond immediate concerns, Wong said the tariffs mark the end of “the era of rules-based globalisation and free trade.”

Speaking after Wong, Deputy PM Gan said it is “still early days” and more time is needed to assess the full impact of the tariffs on Singapore’s economy. The newly-formed task force is still finalising its composition and mandate, but one of its key roles will be in communication and information sharing.

The tariffs, announced by US President Donald Trump on April 2, impose a universal 10 percent duty on all imports into the country, with higher rates for nations deemed to have treated the US “unfairly.” Despite imposing zero tariffs on US imports and running a trade deficit with the US, Singapore is still subject to the baseline 10 percent rate.

“If the tariffs were truly reciprocal and if they were meant to target only those with trade surpluses, then the tariff for Singapore should be zero. But still we are being subjected to the 10 percent tariff,” said Wong, pointing out Singapore’s commitment to open trade through its bilateral free trade agreement with the US.

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

“According to the administration, the sweeping tariffs are needed to fix America’s trade imbalances, but there is nothing inherently wrong about running a trade deficit,” Wong said. “It simply means that American consumers are buying more from the world than the world is buying from America.”

He argued that the US focus on goods trade offers a “partial picture,” as the US runs a surplus in services trade with many partners, including exports of software, education, entertainment, financial, and business services.

Wong criticised the US approach as a “fundamental rejection” of World Trade Organisation (WTO) principles, including the Most Favoured Nation rule which requires equal treatment among all members.

“The US move undermines this principle and opens the door to selective country-by-country trade relationships, based on unilateral preferences,” he warned. “If other countries adopt the same approach, the rules-based trading system will unravel — a reality that will spell trouble for all nations, especially smaller ones like Singapore.”

“Small countries have limited bargaining power in one-on-one bilateral negotiations, so the major powers will dictate the terms and we risk being marginalised and sidelined,” Wong added.

The prime minister cautioned that the likelihood of a full-blown global trade war is rising. While Singapore will not impose retaliatory tariffs, other nations might. China has already announced countermeasures, and the European Union is evaluating its response.

Wong said there is a “brief window” for countries to negotiate with the US before the higher tariff rates take effect on April 9. “It may be possible for some rates to be lowered, but we have to be realistic,” he told Parliament. “Once trade barriers go up, they tend to stay up. Rolling them back is much harder… the uncertainty generated by such a drastic move will dampen global confidence and growth.”

He said the tariffs have already shaken stock markets and hurt business and consumer confidence, which may weigh on global trade and investment. Singapore’s economic agencies have been in touch with both multinational and local firms since the announcement, Wong said, adding that businesses are concerned about being left with stranded assets due to shifting trade rules.

This deep uncertainty, he said, could even tip the US and global economies into recession.

Beyond economics, Wong said the rise in protectionism poses a threat to global norms and institutions, with more countries turning away from “win-win” cooperation to a “me first, win-lose” mindset.

To support businesses in the near term, Singapore has announced corporate income tax rebates and schemes to boost productivity, competitiveness, and market diversification.

“Our economic agencies are also engaging 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,” said Wong.

He also emphasised the importance of strengthening regional collaboration within the Association of Southeast Asian Nations (ASEAN), and referenced recent talks with Malaysian Prime Minister Anwar Ibrahim as part of this effort.

ASEAN economic ministers will hold a special meeting later this week to discuss ways to boost intra-ASEAN trade and reaffirm the bloc’s commitment to regional economic integration.

The deterioration of the US-China relationship is a major concern, Wong added. “There are fewer channels for dialogue, which can serve as guardrails to manage the relationship,” he said. “If the disputes escalate and destabilise US-China relations, the consequences for the world would be disastrous.”

Other countries, including in Europe, may also follow the US in imposing protectionist measures to shield their critical industries from global competition.

“These tariffs may just be the beginning of more increases to come globally,” Wong said.