U.S. tariffs will have multiplier effects that will “generate a broader negative income and demand shock to the Singapore economy”, the Monetary Authority of Singapore said in its macroeconomic review released on Monday.
As well as the direct impact of a 10% baseline tariff on Singapore’s exports to the U.S., its second-largest export market, there will also be indirect effects from the tariffs levied on other countries, the central bank said.
The MAS said the tariffs were a production tax on producers and exporters that would impact corporate incomes and profits and constrain aggregate demand in the city-state.
Singapore, which ran a trade deficit with the U.S. last year, has a lower “reciprocal” tariff rate than other Southeast Asian countries, although Washington has suspended these until July, with a 10% rate currently applying across the board.
Singapore has said the pain of a U.S.-China trade war would be felt everywhere, and the government has warned of uncertainty in its trade-reliant economy and the possibility of recession.
Earlier this month, the MAS eased monetary policy and the government downgraded its GDP growth forecast for the year to 0%-2%, with the effects of the tariffs cited as a key factor.
Singapore is holding a general election on May 3 amid this softening outlook, and cost-of-living pressures are high on the electorate’s minds.
The MAS said the U.S. accounted for 11% of the city-state’s exports in 2024, and estimated that about 55% of shipments would be hit with the baseline 10% tariff. Exports subject to product-specific tariffs, including steel, aluminium, and automobiles and parts, comprised around 5% of shipments.
The MAS said that products such as semiconductors, consumer electronics and pharmaceutical goods, which are currently exempt from tariffs, accounted for about 40% of exports to the U.S., noting the U.S. administration “has initiated trade probes into imports of these goods on national security concerns and could impose restrictions in the coming months”.