In contrast with neighbouring nations like Indonesia, Malaysia, the Philippines, Thailand and Vietnam, Singapore is probably going most susceptible to an exterior slowdown attributable to the tariffs, stated Mr Suan Teck Kin, head of analysis at UOB.
If the US imposes sector-specific tariffs, corresponding to on prescription drugs or semiconductors, the direct drag to Singapore may very well be notably pronounced, he added.
Development has already softened in early 2025, with key sectors corresponding to manufacturing, commerce and logistics slowing down.
Ms Selina Ling, chief economist of OCBC, stated the broad-based nature of the tariffs might imply there are knock-on implications on Singapore’s transport, logistics and monetary hub actions.
If China and Southeast Asian nations see slower commerce and financial progress, Singapore will endure, she stated.
Numerous the provision chain, commerce and funding actions relating to those nations occur in Singapore, she added.
Funding into Singapore might also dip, stated Ms Sheana Yue, an economist at Oxford Economics, pointing to tariffs impacting commerce and enterprise choices.
The quantity of commerce going by Singapore could also be decreased because the demand for items from nations with excessive tariffs falls. US demand for Singapore items would additionally fall.
POTENTIAL BENEFITS
Nevertheless, analysts pointed to attainable silver linings. With tariffs on Singapore items remaining comparatively low, the nation may emerge as a extra enticing supply of imports for US consumers in search of alternate options to closely taxed suppliers.
Whereas Singapore’s exports to the US may decline, the drop is prone to be much less extreme than different Asian exporters, stated Ms Yue.
This might even improve Singapore’s share of US imports, particularly since a “justifiable share” of its exports are exempted from tariffs.
Nevertheless, Singapore’s small land space means it can not simply scale up output to fulfill any elevated demand, and this could restrict a possible improve in exports.
Its excessive working and labour prices might also mood its attractiveness as a provide chain various, stated Mr Yeap Jun Rong, a market strategist at buying and selling platform IG Asia.
