New 10% levy is broadly unchanged from previous reciprocal taxes.
US tariffs are expected to have a limited impact on Singapore’s economy despite uncertainty over a possible increase to 15%, according to Minister of State for Trade and Industry Gan Siow Huang.
The immediate impact is not expected to be significant since the 10% tariff is broadly unchanged from the reciprocal levy already imposed on Singapore’s exports to the US since April 2025, Gan said in Parliament on 5 March.
This follows a 20 February 2026 ruling by the US Supreme Court striking down reciprocal tariffs imposed under the International Emergency Economic Powers Act. On the same day, the US introduced a 10% tariff on all imports under Section 122 of the Trade Act of 1974 for a period of 150 days.
“It is unclear if the current 10% Section 122 tariff will be raised to 15%. It is also unclear what the overall tariff landscape will be after the current 150-day timeline,” she added.
While US President Donald Trump said in a social media post that the tariff would be raised to 15%, Gan pointed out that no official directive has been issued.
However, sectors more dependent on US demand could face greater exposure if tariffs rise, such as precision engineering and some segments under the general manufacturing cluster.
Shafiqah Abdul Samat, principal advisor for trade and customs at KPMG, said some companies may face margin pressure or demand shifts depending on their sector and business model.
“Others could see opportunities from supply chain diversification, production re-allocation, or regional manufacturing consolidation,” Samat added.
KPMG said companies should diversify revenue, rethink sourcing, and make operations more flexible to cope with trade policy volatility.
“We will continue to monitor such developments closely and engage our US counterparts to ensure that our economic interests are safeguarded,” Gan said.
‘Middle East tensions’
Meanwhile, the conflict between the US and Iran could affect Singapore through energy prices, trade channels and financial conditions, said Afham Zulghafir, economist at CGS International Securities Malaysia.
“On trade, the risk is twofold. First, higher shipping insurance premiums, rerouting, and longer transit times raise trade costs,” Zulghafir said.
Broader geopolitical uncertainty could also dampen global demand and weigh on non-oil domestic exports and trade-related services if energy price shocks slow growth in major economies.
“However, there is also a partial offset as a stable and neutral trading hub, Singapore could benefit from trade diversion or capital inflows if firms seek safer operational bases,” he added.