Singapore will set up a taskforce to address economic uncertainties amid quickly escalating global trade tensions that are likely to undermine this year’s growth prospects, Prime Minister Lawrence Wong said, one day before new US tariffs go into effect.
“If the tariffs were truly reciprocal, and if they were meant to target only those with bilateral trade surpluses, then the tariff for Singapore should be zero,” Wong told lawmakers on Tuesday. “These are not actions one does to a friend.”
The taskforce, chaired by Deputy Prime Minister Gan Kim Yong, will help businesses and workers boost their resilience and adapt to the new economic environment, Wong said.
Officials in the Asian financial and trading hub have been sounding the alarm over the slew of reciprocal and retaliatory measures undercutting the global trade regime, warning that the likelihood of a full-blown trade war is growing.
Wong said the country’s economic growth forecast of 1%-3% for 2025 is likely to be revised lower as a result of the ongoing crisis.
“Singapore may or may not go into recession this year,” Wong said. “I have no doubt our growth will be significantly impacted.”
See also: Singapore expected to ease currency settings on tariff risks
While the city-state is only subject to the minimum 10% tariff on all exports to the US, among the lowest levels in Southeast Asia, Singapore officials say the real damage may come when nations retaliate. That has already started to happen, with China’s defiant response to the US prompting Trump to threaten an additional 50% in tariffs this week if Beijing does not back down.
“If other countries adopt the same approach as the US, the rules-based trading system will unravel,” Wong said. “This will spell trouble for all nations. But smaller countries like Singapore will face more pressures.”
Wong said last week that the US is backing away from the multilateral trading system that it helped build and benefit from. In his speech, he pointed to trade wars in the 1930s that contributed to political instability and eventually helped fuel the Second World War.
