In contrast with neighbouring international locations like Indonesia, Malaysia, the Philippines, Thailand and Vietnam, Singapore is probably going most weak to an exterior slowdown brought on by the tariffs, stated Mr Suan Teck Kin, head of analysis at UOB.
If the US imposes sector-specific tariffs, corresponding to on prescribed drugs or semiconductors, the direct drag to Singapore could possibly be notably pronounced, he added.
Progress has already softened in early 2025, with key sectors corresponding to manufacturing, commerce and logistics slowing down.
Ms Selina Ling, chief economist of OCBC, stated the broad-based nature of the tariffs might imply there are knock-on implications on Singapore’s delivery, logistics and monetary hub actions.
If China and Southeast Asian international locations see slower commerce and financial progress, Singapore will endure, she stated.
A number of the provision chain, commerce and funding actions relating to those international locations occur in Singapore, she added.
Funding into Singapore may dip, stated Ms Sheana Yue, an economist at Oxford Economics, pointing to tariffs impacting commerce and enterprise choices.
The amount of commerce going by way of Singapore could also be lowered because the demand for items from international locations with excessive tariffs falls. US demand for Singapore items would additionally fall.
POTENTIAL BENEFITS
Nonetheless, analysts pointed to doable silver linings. With tariffs on Singapore items remaining comparatively low, the nation may emerge as a extra engaging supply of imports for US patrons looking for alternate options to closely taxed suppliers.
Whereas Singapore’s exports to the US may decline, the drop is prone to be much less extreme than different Asian exporters, stated Ms Yue.
This might even improve Singapore’s share of US imports, particularly since a “fair proportion” of its exports are exempted from tariffs.
Nonetheless, Singapore’s small land space means it can’t simply scale up output to fulfill any elevated demand, and this might restrict a possible improve in exports.
Its excessive working and labour prices may mood its attractiveness as a provide chain different, stated Mr Yeap Jun Rong, a market strategist at buying and selling platform IG Asia.
