The Singapore Business Federation (SBF) has expressed its support for the newly formed National Task Force on Reciprocal Tariffs, led by the Ministry of Trade and Industry (MTI), amidst growing concerns over the impact of US and China tariffs on Singaporean businesses. The task force aims to gather input from businesses to address the implications of these tariffs, which have caused significant uncertainty and disruption.
The tariffs, which include a 10% minimum base tariff on Singapore, have broader implications due to Singapore’s extensive offshore presence. According to the SBF National Business Survey, 71% of Singapore businesses operate offshore, with key markets like Malaysia, Indonesia, and China facing reciprocal tariffs of 24% to 34%. This situation has affected businesses that previously adopted a “China + 1” strategy to diversify supply chains.
The global trade tensions are expected to negatively impact Singapore’s economy, particularly in sectors such as logistics, wholesale trade, and financial services, due to the country’s high trade-to-GDP ratio. The SBF warns that businesses may face increased supply chain costs, shrinking margins, and reduced volumes.
In response, businesses are urged to reassess their reliance on the US market and explore opportunities within the region and trade corridors where Singapore has Free Trade Agreements. The SBF emphasises the importance of strengthening economic integration with like-minded nations and enhancing existing agreements like the Regional Comprehensive Economic Partnership (RCEP).
The SBF’s Centre for the Future of Trade and Investment (CFOTI) is actively engaging businesses through surveys and workshops to address these challenges. Upcoming events include a business survey on tariffs, a briefing on US reciprocal tariffs, and a workshop on export control and trade compliance.
Businesses are encouraged to participate in these initiatives and work with CFOTI advisers to develop mitigation strategies, such as market diversification and long-term supply chain resilience planning.
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