Singapore Downgrades 2025 Economic Growth Forecast... Concerns Over US Tariffs Lead to Cooperation Discussions

As Singapore and the United States seek to deepen their economic relationship, the US has decided to maintain a basic tariff of 10% on imports from Singapore. Singapore's Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong stated that he held a video conference on April 25th with US Secretary of Commerce Howard Lutnick to discuss economic and business ties between the two countries.

Minister Gan Kim Yong emphasized in a LinkedIn post that "bilateral trade and Singapore's investments support about 350,000 American jobs, and the US recorded a trade surplus of $30 billion (approximately 41 trillion KRW) with Singapore last year." Secretary Lutnick also acknowledged the balanced trade relationship between the two nations.

However, the US indicated that it is not prepared to lower the 10% basic tariff on imports from Singapore. Minister Gan stated, "While the US is not ready to reduce the basic tariff, both countries agreed to explore ways to deepen economic relations positively." The two sides will continue discussions on practical cooperation measures.

Minister Gan Kim Yong welcomed Secretary Lutnick's visit to Singapore and expressed anticipation for strengthening the trade and investment partnership between the two countries.

This meeting took place after the imposition of a 10% tariff on Singaporean imports by a former US president on April 2nd. This tariff took effect on April 5th.

On April 14th, the Singapore Ministry of Trade and Industry lowered its 2025 economic growth forecast from the previous 1-3% to 0-2% due to the deepening US-China trade tensions. Some economic experts have warned that Singapore could face a technical recession in 2025.

Singaporean Economy Faces Increased Instability Amid Deepening US-China Conflict

The Singaporean economy, highly dependent on external factors, is sensitive to changes in the global economic environment. In particular, the US-China trade conflict can significantly impact the Singaporean economy. The US tariff imposition could weaken Singapore's export competitiveness, which could negatively affect Singapore's economic growth.

Furthermore, Singapore's high proportion of intermediate goods exports, such as electronics and machinery, makes it vulnerable to changes in the global supply chain. If the global supply chain is reorganized due to the US-China trade conflict, Singapore's exports could be negatively affected.

The Singaporean government is making various efforts to respond to these changes in the external economic environment. Minister Gan Kim Yong aims to resolve economic uncertainty and secure new growth drivers by strengthening cooperation with the United States. Singapore is also strengthening cooperation with ASEAN countries and pursuing economic diversification by exploring new markets.

The Singaporean government is also striving to secure future growth engines through technological innovation and human resource development. Singapore is actively investing in fostering advanced industries such as artificial intelligence, fintech, and biotechnology, and is also focusing on reforming the education system for human resource development.

Despite the US decision to maintain tariffs, Singapore plans to continuously strengthen economic cooperation with the US to overcome economic uncertainties and seek new growth opportunities.