SINGAPORE: The United States is unlikely to impose direct tariffs on goods from Singapore, but Singapore will still feel indirect impacts from tariffs, said Foreign Affairs Minister Vivian Balakrishnan.
He was answering a supplementary question in parliament on Tuesday (Feb 4) about the impact of US tariffs on Canada, Mexico and China.
US President Donald Trump announced the tariffs on Saturday, but on Monday agreed to a 30-day pause for Canada and Mexico in exchange for concessions on border and crime enforcement. Meanwhile, China has retaliated with tariffs of 10 per cent to 15 per cent on some goods. These will take effect on Feb 10.
Dr Balakrishnan said tariffs and emerging tariffs are a reality going forward.
"I will take some risk and say that I do not anticipate us being on the hit list for direct tariffs, because ... the United States has a surplus as far as the trade balance with us is concerned," he said.
A trade surplus means that the amount of goods and services that Singapore imports from the US exceeds the amount of goods and services that Singapore exports to the US.
But Singapore will still be affected by tariffs on other countries that affect global supply chains and world trade because our economy is small and open, with trade constituting more than three times Singapore's gross domestic product, said Dr Balakrishnan.
Dr Balakrishnan said Singapore and the US enjoy a substantive, multi-faceted and long-standing partnership that has been nurtured over the past 60 years across both Democratic and Republican administrations.
During former president Joe Biden's term, Singapore and the US institutionalised cooperation in areas such as space, critical and emerging technologies and nuclear energy.
Last year, Singapore and the US also commemorated 20 years of a free trade agreement.
"The US is our top trading partner in services, our second largest trading partner in goods, and our largest foreign investor," said Dr Balakrishnan, adding that Singapore is the third largest Asian investor in the US.
He said Singapore worked well with President Trump during his first term in office and looks forward to working closely with him to further deepen bilateral ties between the two countries.
But he said the world is now at a new inflection point where the liberal world order is being eroded and has lost domestic political support in many parts of the world.
That is the context for changes happening within the US and for the "unfolding drama" with other countries.
He said there is a "significant lack of strategic trust" between the US and China, and the global economy is decoupling as a result.
Singapore needs to engage with the different poles of power that are emerging, including with the US, China, India, European Union, Africa and South America. Despite the mood going against globalisation, Singapore has managed to sign free trade agreements with new partners.
Singapore has to continue to play a constructive role. "We have to be consistent, reliable and a trustworthy host to enterprises from all over the world, including the US and China," he said.
Singapore is watching the developments closely, and needs to keep calm.
"We need to keep our eyes open, but we need to be very careful in what we say and how we behave and playing it straight – saying the same thing to everyone, and meaning and doing what we say is valuable, but I do need to prepare Singaporeans that it will be a turbulent ride in the months or years to come," he said.
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He was answering a supplementary question in parliament on Tuesday (Feb 4) about the impact of US tariffs on Canada, Mexico and China.
US President Donald Trump announced the tariffs on Saturday, but on Monday agreed to a 30-day pause for Canada and Mexico in exchange for concessions on border and crime enforcement. Meanwhile, China has retaliated with tariffs of 10 per cent to 15 per cent on some goods. These will take effect on Feb 10.
Dr Balakrishnan said tariffs and emerging tariffs are a reality going forward.
"I will take some risk and say that I do not anticipate us being on the hit list for direct tariffs, because ... the United States has a surplus as far as the trade balance with us is concerned," he said.
A trade surplus means that the amount of goods and services that Singapore imports from the US exceeds the amount of goods and services that Singapore exports to the US.
But Singapore will still be affected by tariffs on other countries that affect global supply chains and world trade because our economy is small and open, with trade constituting more than three times Singapore's gross domestic product, said Dr Balakrishnan.
US-SINGAPORE RELATIONS
Dr Balakrishnan said Singapore and the US enjoy a substantive, multi-faceted and long-standing partnership that has been nurtured over the past 60 years across both Democratic and Republican administrations.
During former president Joe Biden's term, Singapore and the US institutionalised cooperation in areas such as space, critical and emerging technologies and nuclear energy.
Last year, Singapore and the US also commemorated 20 years of a free trade agreement.
"The US is our top trading partner in services, our second largest trading partner in goods, and our largest foreign investor," said Dr Balakrishnan, adding that Singapore is the third largest Asian investor in the US.
He said Singapore worked well with President Trump during his first term in office and looks forward to working closely with him to further deepen bilateral ties between the two countries.
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But he said the world is now at a new inflection point where the liberal world order is being eroded and has lost domestic political support in many parts of the world.
That is the context for changes happening within the US and for the "unfolding drama" with other countries.
He said there is a "significant lack of strategic trust" between the US and China, and the global economy is decoupling as a result.
Singapore needs to engage with the different poles of power that are emerging, including with the US, China, India, European Union, Africa and South America. Despite the mood going against globalisation, Singapore has managed to sign free trade agreements with new partners.
Singapore has to continue to play a constructive role. "We have to be consistent, reliable and a trustworthy host to enterprises from all over the world, including the US and China," he said.
Singapore is watching the developments closely, and needs to keep calm.
"We need to keep our eyes open, but we need to be very careful in what we say and how we behave and playing it straight – saying the same thing to everyone, and meaning and doing what we say is valuable, but I do need to prepare Singaporeans that it will be a turbulent ride in the months or years to come," he said.
Continue reading...