SINGAPORE: Prime Minister and Minister for Finance Lawrence Wong said that while a 10 per cent tariff imposed by the United States is not ideal, it is a level that Singapore “can live with” as it navigates an evolving global trade environment.
He made these remarks at the “Global-City Singapore: SG60 and Beyond” conference on 29 July 2025, co-hosted by the Institute of Policy Studies (IPS) and the Singapore Business Federation (SBF).
Wong noted that although Singapore prefers zero tariffs, the 10 per cent rate falls within the lowest category of the tariffs recently introduced by the US government.
“We can live with it, and we can still do business, and there are (and) will still be many opportunities for trade and investment with the US,” he said.
US tariff moves spark concern, but Singapore stays strategic
The US baseline tariff was introduced by the administration of President Donald Trump, with recent deals seeing similar rates of 10 to 15 per cent extended to the UK, EU, and Japan.
Singapore is currently subject to a 10 per cent rate, among the lowest announced during the so-called “Liberation Day” tariff declaration on 2 April.
Despite the rate, Wong underscored the need for Singapore to remain grounded in reality.
“We must be realistic and take the world as it is,” he said. “But we are not passive bystanders. We can shape our own destiny.”
He added that the US appears to be withdrawing from global leadership, leading to a “messier world” and less predictability in international trade.
Deepening regional ties and multilateral initiatives remain key focus
To counter rising uncertainty, Singapore is focusing on strengthening multilateral institutions, deepening bilateral partnerships, and intensifying cooperation within ASEAN.
Wong cited Singapore’s efforts to link the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with the European Union, a move he said is “gaining traction”.
He expressed hope that this effort can eventually be formalised.
Within ASEAN, Wong emphasised the need to remove non-tariff barriers and advance economic integration.
“If we can remove all the unnecessary distractions like border issues and ensure peace and stability, we can make progress,” he said.
Wong added that ASEAN’s current per capita GDP stands below US$6,000, but increasing it to US$10,000 would be transformative for the region.
Addressing concerns about ASEAN’s income gap, he said growth is essential for alleviating inequality, and Singapore stands ready to share its experience in managing income disparities.
Gan Kim Yong: US remains non-committal on tariff flexibility
Deputy Prime Minister Gan Kim Yong, who also spoke at the conference, provided an update on Singapore’s trade discussions with the US following his visit to Washington from 20 to 26 July.
Gan revealed that the US remains “non-committal” on whether the 10 per cent tariff rate will remain or change, and has shown no interest in offering immediate concessions.
“They are not in the mood to discuss any discount to the baseline tariff,” he stated.
Nevertheless, Singapore has expressed its interest in future negotiations to review or potentially lower the tariff rate.
Gan said his conversations in Washington were aimed at keeping the issue open for further engagement, should opportunities arise.
US tariff rationale and shifting trade priorities
Gan also responded to questions on US trade policy during a dialogue moderated by David Rennie, geopolitics editor at The Economist.
While the US appears to be recalibrating its trade engagement, Gan said it is not entirely disengaging from global cooperation.
He noted that US interest in working with Europe and supporting business development remains, though the country’s priorities may shift over time.
On the rationale for the new tariffs, Gan said US officials highlighted three main objectives:
- Raising revenue for the federal administration
- Balancing trade with foreign partners
- Rebuilding domestic manufacturing
“Whether you agree or not, that’s a separate issue,” Gan said, acknowledging the political motivations underpinning the tariffs.
He explained that the baseline tariff is primarily intended to generate revenue, partly to fund tax incentives and other expenditure initiatives.
Sectoral discussions on pharmaceuticals and semiconductors remain pending
During his trip to Washington, Gan was unable to meet US Secretary of Commerce Howard Lutnick, which meant detailed discussions on pharmaceutical tariffs could not take place.
However, he met other senior officials, including Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer.
Their discussions focused on sustaining the long-standing, mutually beneficial economic relationship between Singapore and the US, and exploring potential collaboration in areas such as the digital economy.
Earlier, Gan had indicated Singapore’s intention to seek zero tariffs on pharmaceuticals through sectoral agreements.
“I think the administration’s focus now is to finish the negotiation on reciprocal tariffs,” he said.
“After that, they will start to engage countries on specific sectoral tariffs on pharmaceuticals and semiconductors.”
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