With over 300% trade-to-GDP exposure, Singapore braces for ripple effects from escalating tariff tensions
Singapore isn’t directly in the crosshairs of the newest round of US-China tariffs, but it might as well be. In a country where trade is more than three times the size of the economy, any tremor in global trade flows hits home hard.
The Singapore Business Federation (SBF) is throwing its weight behind a new government-led task force aimed at tackling just that. Led by the Ministry of Trade and Industry (MTI), the task force will dig into the fallout from the tit-for-tat tariffs and sketch out ways for businesses to brace—or pivot.
A Wake-Up Call for Singapore Inc.
The business community isn’t panicking, but it’s definitely on edge.
SBF CEO Kok Ping Soon didn’t mince words. He called the ongoing developments “deeply concerning,” noting that uncertainty and disruptions have already crept into boardrooms across the city-state.
Singapore might be sitting in the 10% minimum base tariff zone under the current US regime—better than most—but the ripple effect is the real threat. Malaysia, Indonesia, China—Singapore’s key trade partners—are all staring down steeper barriers. That hits supply chains. That hits costs. That hits confidence.
And confidence, as any business leader will tell you, is half the battle.
One-sentence paragraph: Even if the tariffs aren’t aimed directly at Singapore, the ricochet is impossible to dodge.
The Trade Math Is Brutal
Trade isn’t just a pillar of Singapore’s economy—it’s the whole scaffolding. The trade-to-GDP ratio is over 300%, making it one of the most exposed economies in the world.
When global trade stumbles, Singapore gets a black eye.
Sectors most at risk?
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Logistics: Tighter customs checks and slower cargo flows mean delays and rising costs
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Wholesale trade: Middlemen could get squeezed by price markups or inventory issues
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Financial services: With global transaction volumes dipping, banking and payments could take a hit
And it’s not just multinationals who feel the pain. Domestic SMEs tied into regional supply chains or dependent on export volumes are feeling the heat too.
A broader trade war could also raise inflation, with importers passing costs on to consumers. Price hikes? Lower demand? That’s a one-two punch businesses can’t afford right now.
Who Pays the Tariff Bill? Depends on Who’s Holding the Power
Here’s the tricky part: tariffs might look like a country-on-country tax fight, but businesses end up stuck in the middle.
Kok said the real economic pain comes down to pricing power. If you’re a big brand with loyal customers, you might pass on the added costs. If you’re a supplier already operating on razor-thin margins? Good luck.
One-sentence paragraph: Tariffs are taxes by another name—but only if you’re too small to fight back.
Supply chain exposure is key. Many Singapore-based companies act as intermediate processors or logistics nodes. A single tariff upstream can domino into costs at every stage, even if the final good isn’t sold in the US or China.
Compliance, Risk—and a Hard Look at Dependencies
SBF isn’t just watching this unfold—they’re handing out advice.
Kok urged companies to focus on compliance first. No one wants to get caught offside by new trade rules, especially not now. The second priority? Supply chain risk management. Who are your suppliers? Where are your customers? What’s your backup plan?
And then there’s the uncomfortable question: Are you too dependent on the US?
SBF suggests companies take a cold, hard look at their market mix. The goal isn’t to abandon the US—it’s still a critical market—but to ensure no single country can sink the ship if trade conditions turn worse.
There’s a quiet urgency now to build resilience, not just efficiency.
ASEAN and RCEP Might Just Be the Pressure Valves
While the US and China go head-to-head, there’s a silver lining—regional trade might finally get the attention it deserves.
Kok pointed to ASEAN and existing trade corridors like the Regional Comprehensive Economic Partnership (RCEP) as routes for businesses to explore. These agreements are already signed. The infrastructure is in place. What’s needed now is the will to act.
The task force, backed by SBF, could push forward discussions to reduce non-tariff barriers across Southeast Asia—things like differing product standards, customs documentation, or unclear licensing requirements.
One-sentence paragraph: If tariffs close one door, regional trade might crack open a few windows.
There’s a real chance here for ASEAN countries to look inward, cooperate more, and build something that’s not held hostage by superpower trade spats.
Businesses Asked to Speak Up, Not Sit Out
To better understand how companies are coping—and what they need—SBF’s Centre for the Future of Trade and Investment (CFOTI) is launching a survey on April 11.
It’s not just box-checking. This survey is meant to inform real strategies for businesses across sectors, sizes, and supply chains.
It’ll ask questions like:
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Have you experienced supply delays due to tariffs?
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Are you passing added costs to consumers, absorbing them, or cutting corners?
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What new markets or suppliers are you exploring?
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What kind of support (financial, policy, advisory) would help you adapt?
If enough businesses speak up, the hope is that the task force will have the data and momentum to push for meaningful support—before damage becomes permanent.
