SINGAPORE: Rising trade tensions have sparked growing concerns over Singapore’s export-oriented industries, especially in pharmaceuticals and semiconductors, said RHB Group chief economist and head of market research Barnabas Gan, following discussions with policymakers in the city-state on sectoral tariffs.
Last year, these two sectors, along with consumer electronics, accounted for around 40% of Singapore’s domestic exports to the US. Pharmaceuticals alone made up 12.3%.
According to Singapore Business Review, which cited the bank’s report, the outlook for Singapore’s export-oriented sectors like chemicals, machinery and transport, and manufacturing is bearish.
Policymakers highlighted that a 25% tariff could be introduced on both pharmaceutical and semiconductor exports, which would weigh further on Singapore’s exports, said Mr Gan. However, they’re expecting positive outcomes from ongoing discussions with the US on pharmaceutical tariffs, as they aim to shield one of Singapore’s most vital industries from the impact of rising trade tensions.
In April, Trade and Deputy Prime Minister Gan Kim Yong discussed pharmaceutical exports and access to advanced artificial intelligence (AI) chips with US Secretary of Commerce Howard Lutnick, according to a trade ministry transcript.
The comment followed a 13% year-on-year jump in Singapore’s non-oil domestic exports (NODX) in June, after a 3.9% drop in May, with gains seen in both electronic and non-electronic shipments.
However, the trade minister warned that new US tariffs and diminishing front-loading activities could weigh on the city-state’s economic growth over the next six to 12 months. /TISG
