If the U.S. tariff announcement had come just a day earlier—on 1 April—you might have mistaken it for an April Fool’s joke. Unfortunately, it wasn’t. On 2 April, U.S. President Donald Trump announced a sweeping new trade policy that includes a 10% baseline tariff on all imported goods, triggering global concerns about a renewed trade war.
As Prime Minister Lawrence Wong pointed out in a video address, “the era of rules-based globalisation and free trade is over.” This shift marks a significant change in the global economic order, and even Singapore, a longstanding trade partner of the U.S., hasn’t been spared.
What’s surprising is that Singapore, a country with which the U.S. enjoys a sizeable trade surplus, will be subject to a 10% tariff. In total, around 90 countries have been affected, including many Asian economies:
In total, about 90 countries were affected with many Asian countries including China (54%), Cambodia (49%), Vietnam (46%), Thailand (36%), South Korea (25%), and Japan, Malaysia and Brunei (24%) seeing high tariffs.
Despite the impact, Singapore has decided not to retaliate. Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong explained that retaliatory tariffs would only raise the cost of U.S. imports, hurting local consumers and businesses.
How Do U.S. Tariffs Work?
U.S. tariffs are taxes imposed by the federal government on imported goods. This means the U.S. importer (the company bringing the goods into the U.S.) will pay the tariff when the goods enter the country. The cost will likely be passed on to American businesses or consumers through higher prices. The reason for the tariffs is to make imports more expensive and allow U.S. made products to become more competitive. At the same time, it should increase US government revenue.
Singapore and the U.S. have been close economic partners since the USSFTA came into effect in 2004. The agreement has deepened trade and investment ties between the two countries. In fact, under the FTA, U.S. citizens receive the same stamp duty treatment as Singaporeans when purchasing property, meaning no Additional Buyer’s Stamp Duty (ABSD) for their first residential property.
Here are some interesting statistics on the US-Singapore economic partnership that might surprise you.
#1 The U.S. Has A Positive Trade Surplus With Singapore
Singaporeans consume various products from the U.S., from electrical and electronic equipment to agricultural goods, mineral fuels and aviation parts.
In 2024, the U.S. exported US$46 billion worth of goods to Singapore while importing US$43.2 billion. This resulted in a trade surplus of US$2.8 billion in favour of the U.S.
#2 The U.S. Is The Third Largest Trading Partner Of Singapore
As of 2024, the United States is Singapore’s third-largest trading partner, with total trade amounting to S$132 billion, trailing only China (S$170.2 billion) and Malaysia (S$138.6 billion).
However, unlike our trade relationships with China and Malaysia, where Singapore exports more than we import, our imports from the U.S. exceed our exports to them. This means the U.S. enjoys a trade surplus with Singapore.
With the introduction of a 10% U.S. tariff on imports, Singapore-made goods will become more expensive for U.S. buyers. This could dampen demand and reduce trade volumes for Singapore companies exporting to the U.S. The results are that the deficit in trade between Singapore and the U.S may widen.
#3 U.S. Investment in Singapore Surpasses Combined Investments in China, Japan, and South Korea
It may surprise many to learn that as of 2022, U.S. foreign direct investment (FDI) in Singapore stood at approximately US$309.4 billion. That’s more than the combined U.S. investments in China, Japan, and South Korea.
This staggering figure highlights Singapore’s position as a regional trade partner and a key strategic investment hub in the Indo-Pacific, trusted by global companies for its stability, connectivity and pro-business environment.
#4 Singapore’s Significant Investment in the U.S
When we think about economic ties between Singapore and the United States, we often focus on the trade of goods. But what’s sometimes overlooked is just how much Singapore invests back into the U.S. economy.
As of 2021, Singapore’s direct investment in the U.S. stood at US$44 billion, making us the third-largest Asian investor in the United States, behind only Japan and South Korea. This is a remarkable figure, especially considering Singapore’s size and population.
Singapore’s sovereign wealth funds and institutional investors, including Temasek and GIC, have long viewed the U.S. as a core market for long-term, stable returns. Their capital helps fund infrastructure development, business growth and job creation in cities across the U.S.
The End Of The Bridge?
If the era of global free trade agreements is truly ending, Singapore, as a small and highly open economy, stands to lose more than most.
Unlike larger economies that can rely on vast domestic markets to drive growth, Singapore depends heavily on global trade for everything from food and energy to industrial components and capital goods. Singapore’s total trade is more than three times its GDP, one of the highest ratios in the world.
For a country like Singapore, this challenges the model that has driven our economic success: one built on open borders, international cooperation, and trade-driven growth.
Read Also: Guide To Understanding Free Trade Agreements (FTAs) – And How It Helps Companies And Businesses
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