The PAP Government will form a taskforce to support businesses and workers. This is in response to sweeping new United States tariffs that could slow economic growth and impact jobs and wages.
Prime Minister and Finance Minister Lawrence Wong announced this during his ministerial statement on the US tariffs and their implications for Singapore in Parliament on Tuesday (Apr 8).
The new taskforce, chaired by Deputy Prime Minister Gan Kim Yong, will help businesses and workers address immediate uncertainties, strengthen their resilience, and better adapt to the new economic environment.
It will comprise economic agencies, the Singapore Business Federation, the Singapore National Employers Federation, and the National Trades Union Congress.
Singapore has the resources to support workers and businesses
In the near term, global growth is expected to be weaker, leading to a decline in external demand for Singapore’s goods and services, PM Wong pointed out.
Outward-oriented sectors, such as manufacturing, wholesale trade, and transportation, will bear the brunt of this impact.
While the likelihood of a recession in Singapore is still unclear, our nation’s economic growth will undoubtedly be significantly affected.
The Ministry of Trade and Industry, which had initially projected GDP growth between 1 per cent and 3 per cent for 2025, is reassessing and will likely revise these estimates downward.
“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,” said PM Wong.
PM Wong assured Singaporeans that the Budget 2025 measures will provide support for any short-term strain on Singaporeans and local businesses.
The Government is continuing to monitor developments closely and stands ready to do more, if and when necessary, he stressed.
“We have the resources to do so because of the financial discipline and prudence we’ve exercised over many decades.”
He noted that our economic agencies are engaging with firms affected by the tariffs to better understand their responses, and explore how the government can support them, and address specific issues they face.
S’pore will redouble efforts to remain a trusted business hub: PM Wong
PM Wong stressed that Singapore must redouble its efforts to remain a key node in global flows and a trusted business hub in the new environment.
Singapore will forge closer ties with like-minded partners who 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 this path,” said PM Wong. “We will identify other partners to join us and work around this – to ensure resilience and maintain critical parts of our multilateral system, while laying the foundations for a possible new and different global system that can be achievable later.”
In particular, Singapore will strengthen its collaboration and integration within the Association of Southeast Asian Nations (ASEAN).
PM Wong also informed Parliament that he had touched base with key international leaders and partners, including UK Prime Minister Keir Starmer. This will help Singapore maintain open conversations with like-minded trading partners, and expand economic co-operation.
Disappointed by US actions
Singapore has a free trade agreement with the US. It imposes zero tariffs on US imports and runs a trade deficit with the US.
PM Wong pointed out that 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.
“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 said.
PM Wong also criticised the US approach to trade tariffs as a “fundamental rejection” of World Trade Organisation principles.
He said: “If other countries adopt the same approach, the rules-based trading system will unravel. This will spell trouble for all nations, especially for smaller countries like Singapore,” he said.
“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.”
PM Wong: The likelihood of a full-blown global trade war is growing
PM Wong also cautioned about the likelihood of a full-blown global trade war.
Business and consumer confidence has already been hit by the tariffs, and international trade and investments will suffer.
Multinational enterprises and local businesses are concerned about weakening demand, with some putting new projects on hold to assess the impact of the tariffs, he noted.
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 also urged Singaporeans to remain united – pooling our resources, resilience and resolve as we navigate a changed world.
“The government will do everything we can to steer Singapore through the choppy water, and make sure no one is left behind… Above all, we will put the interests of Singapore and Singaporeans at the centre of all we do.”
