The recent decision by US President Donald Trump to double tariffs on steel and aluminium imports from 25% to 50% is expected to have minimal direct impact on Singapore’s economy, according to a report by UOB Global Economics and Markets Research. The proclamation, effective from 4 June, excludes imports from the UK due to a separate trade agreement.
Singapore’s limited exposure to aluminium and steel exports means the direct effects of these tariffs are negligible. However, the report highlights potential indirect consequences through Singapore’s key export partners, which could experience reduced manufacturing activity. Countries such as South Korea, India, Taiwan, China, Japan, and Vietnam might see a downturn in manufacturing due to weaker external demand, which could, in turn, affect Singapore.
The report also warns of broader trade tensions, noting that the increased tariffs could exacerbate existing trade disputes. China has criticised the US for violating their trade truce, whilst the European Union has indicated it might accelerate retaliatory measures if the US continues with its tariff threats.
Jester Koh, an associate economist at UOB, emphasised the importance of monitoring these developments, as they could influence ongoing trade negotiations between the US and its partners. The situation underscores the interconnected nature of global trade and the potential ripple effects of policy changes in major economies.
In summary, whilst Singapore’s direct exposure to the increased tariffs is limited, the broader implications for regional trade dynamics remain a concern. The situation warrants close observation as it unfolds, particularly regarding its impact on Singapore’s export partners.
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