SG in ménage à trois with US and China for next 30 years

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Adjusting to a bigger, more powerful China: SM Lee​

It cannot be business as usual. Rules made decades ago will need to change, and attitudes too.​

Lee Hsien Loong

Senior Minister Lee Hsien Loong with moderator Lee Huay Leng, editor-in-chief of SPH Media’s Chinese Media Group, at the FutureChina Global Forum on Oct 18. PHOTO: LIANHE ZAOBAO

Oct 22, 2024

Given China’s considerable heft, the impact it makes globally as it changes is widely felt and hard to ignore. During a fireside chat at the FutureChina Global Forum on Oct 18, Senior Minister Lee Hsien Loong discussed different aspects of these changes, including the presence of Chinese companies in the region and Singapore. Edited excerpts of his remarks follow:

Adjustment issues​

I think the fundamental issue – I would not say it is a problem – the fundamental issue is that China has changed so much from what it was, to what it is today.
First, the size. When China started its Open Door Policy in 1978, it was a very small part of the world economy and a negligible part of international trade. Today, it is 20 per cent of the world economy and 20 per cent of global trade. So anything which China does, whether it is good or it is bad, the impact on other countries is enormous.
Secondly, China has developed and become much more advanced. In the earlier phase, it was growing, it was exporting. But it was making things which other countries wanted, needed and did not make themselves. You make clothing, you make belts, buttons, you make lower-end electronics products, assemble goods, things which other countries were happy to say: “Well, it is not economic for me to do. China can do.” But now China has moved up. All those products which are labour intensive and which it used to make, are migrating. They are going to Vietnam, they are going to Bangladesh, other Third World countries.
China is making EVs. You are making portable photovoltaic panels. You have got your pharmaceutical industries. You are in industries which are competing with similar advanced industries in the developed economies. It is a more competitive relationship and therefore China’s growth in these markets is not just benefiting the consumers, but also impacting the producers in other countries. And that is difficult. You have to accommodate somehow, but it is difficult.
Thirdly, because China has grown and developed so much, its interests around the world have also grown and developed. You have strategic interests, you have security interests, you have foreign policy interests in very faraway parts of the world. The Belt and Road Initiative includes countries in South America. And in Africa, China is very active. China’s interface with the rest of the world is multifaceted. And then the question comes: “Who is No. 1? Who is No. 2? How do No 1. and No. 2 work together? Can you work together?”
There is no doubt that for the world, we are much better off with China like it is today, than with China as it was 30 or 40 years ago or 50 years ago. But it means that there has to be an adjustment. It is not a matter of right and wrong. But it is in China’s interest, and it is in the world’s interest that this adjustment has to be made. What is the adjustment? It is to acknowledge that the situation has changed, that China’s heft, its influence, its impact on the world are on a different scale. And you have to make accommodations and adjustments to the rules, which were set up at a time when China was much smaller.

If you are a small economy and your exports actually do not threaten any of my industries, I am prepared to cut you a lot of slack. You can subsidise them, you can protect your own market. You can have all sorts of different privileges, which the more developed economies have decided not to have amongst themselves. But when you are now not so underdeveloped, and when you are huge, and when your exports can be maybe 80 per cent of the global manufacturing of photovoltaic panels, for example, then those concessions are no longer politically tenable. And it has to be worked out. It has to be re-negotiated so that you can have a good basis to do those things. I think that is very hard. That is one thing China has to do.
On the other side, on the part of the other countries in the world, you have to get used to the fact that there is going to be a very powerful and developed China in this world, a China which has advanced technologies, which is going to be world class in many areas and world leading in some. And we have to have some way to induct them into the global system and to accommodate their legitimate concerns and interests.
And if you do not do that, and you say, “No, I do not want China to be strong. I want it to remain always No. 2 or better still, No. 2.5”, I think that is going to head for a lot of mutual distrust and difficulties. But it is a very difficult adjustment to make, because if you are at 2.5, you wish to become 2. And when you reach 2, you may wish to become 1.5. And so how to have that balance and wisdom to maintain a cooperative relationship which will benefit both sides? I think that takes statesmanship of a very high order on the part of the major powers.

Does it help if China can explain itself better?​

Talking is always useful. But at the same time, there has to be an acknowledgement of the real issues, the hard points: why there are differences with one another, and how we are prepared to accommodate one another. Because if I am not, if all my claims are indubitable and beyond question, and the other side says all my entitlements are also beyond doubt, then there is nothing to talk about. I make you a speech, and you make me a speech, and at the end we go away, both unhappy. So, it is necessary to have conversation, but it is also necessary to be able to make the accommodations and to take steps together, which can gradually build trust and resolve difficulties.
Because of China’s size, sometimes China will feel: “But the other countries are doing it, why can I not?” And the answer is, well: “What to do? They are small, you are big.” When you are big, you have greater influence; but at the same time, there comes with it greater responsibilities and the need for restraint. Because in a world without an international order... it is the law of the jungle.
As Thucydides said: “The powerful do what they will, and the weak suffer what they must.” But if the world were like that, everybody is worse off, including the powerful ones, because they will fight each other to the death. So, the great countries, the big countries, have to have a certain self-awareness and restraint and say: “Well, I am entitled to this, if you consult your lawyers and international law. But I restrain myself. I am not only aiming to be stronger than others, but also to be accepted, respected, and if possible, to have others also admire me and want to have me as their friend.”

Stimulus packages and effect on growth​

I think that the stimulus packages will be helpful in boosting confidence and then perhaps simulating demand to the extent that the money will be spent, and then there will be some multiplier. But I think inherently, at this phase, China’s economy will grow slower than it used to. It used to grow 8 per cent to 10 per cent a year, sometimes even more than that. Now, if you can sustain 5 per cent per year for another 10 years, I think you are doing well, and there are fundamental reasons for that.
First of all, you are already more mature. It is not so easy to keep on just transforming yourself. Secondly, the labour force is not expanding anymore. The total population has peaked, the working age population has also peaked. It has levelled off, probably starting to come down already, slowly. And so, you can no longer just have a natural expansion of the economy. Thirdly, I think, with the external environment having turned less favourable, there are geostrategic tensions between China and America, even China and Europe. And so that external environment is not as favourable as before. The foreign investments need more encouragement to come into China. The export markets are not as open as they used to be. So that is another factor which influences China – not just the growth, but also the upgrading and transformation.
Fourth, partly in response to this external environment, but also for domestic reasons – I think the Chinese government’s priorities have shifted some. During an earlier phase, the slogan was “发展是硬道理” – Economic development is the top-most priority, is the hard truth. But now, economic development is very important, but trumping that is national security. And I think equalling that, at least, are domestic political considerations. In that situation, I think the environment for people to spend, for companies to start up, or for big companies to build new businesses... will be more cautious. It is inevitable.
The government will give reassurances that they do want the private sector to have an important role. They do want entrepreneurs to have confidence. But the national security considerations are important. The political considerations cannot be ignored. And that has an impact.

Underestimating China – and the West​

I think it is very unwise to write off China. This works in both directions. The Westerners say: “We will do this and the other, and China will stay down.” I tell them they are wrong. They do not fully believe me. When I go to China, and sometimes, the confidence with which my hosts expound their views causes me to tell them: “You know, the Americans have a lot of problems. You can see all of the problems, but they have a lot of strengths, and sometimes you cannot see all of their strengths. And they are not going to disappear, and they will be there and formidable, I think, for a very long time to come.” And I am not sure whether they fully understand why I am saying this, so I think both sides have this danger of underestimating the other.

Impact of Chinese companies on South-east Asia​

China is huge. Its impact on South-east Asia is very large. When their companies come, it means that they provide good products, good services, fierce competition for our companies, for our industries, for our economies. In fact, we send our trade unionists and trade union leaders to China, to visit Shenzhen, to visit Yangshan, to visit your high-tech centres, to visit, to see the factory lines – Fosun – to understand the drive, the hunger, the transformation which is taking place and how advanced China is already. And they come back and they understand why we have to work hard, and work harder.
I think the answer should be: you have to work harder. It will be an impetus for us to upgrade, transform our companies, train our people, retrain our people, be competitive and meet the best in the world. And I think we can do that.

Is the Government concerned about talk of ‘Singapore washing’?​

Well, we do not usually use labels like that. We have companies in Singapore from all over the world. We welcome reputable companies to come here and to make use of our business environment, our pro-business climate, our infrastructure, our networks, and to contribute to Singapore’s prosperity and link us to all parts of the world. So if the Chinese come, they are good companies – they create jobs, they pay well, they bring technology, they bring markets – I say “come”. The Americans come, I say the same; the British come, I say the same; the Japanese come, they are all here.
But nobody believes that just because the company is in Singapore, that means it is a Singapore-owned company. We have got Dyson here. We have got General Electric here. We have got Citibank here. We have got all the major Japanese multinationals here. Everybody knows that they are Japanese, American, British companies.
So when TikTok is in Singapore, everybody knows that TikTok’s parent is ByteDance and TikTok’s origins are in China. The CEO may be a Singaporean, but Singaporeans work for companies belonging to all kinds of shareholders. So on that basis, you are welcomed in Singapore. But of course, we would like to know where you come from and what your antecedents are. Because if it turns out that you are not the one we think you are, we also would like to make a few more inquiries.

What considerations does Singapore have in attracting Chinese entrepreneurs and talent headed abroad?​

I think first of all, we are open to everybody, to people from around the world. If you are an entrepreneur, if you are a business person, if you can make a contribution to the Singapore economy, we welcome you to come to Singapore. But you have to abide by our laws. You have to follow our rules. You also have to understand how our society works, and fit in as a member of the Singaporean society. For example, we may not be as poorly off as we used to be, but we try very hard not to flaunt wealth, and success. If you have a big car, please do not drive it at high speed down Orchard Road in the middle of the night, for example. These are some of the considerations. So when you come to Singapore, we ask, can you fit in? Can you make a contribution?

 

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It’s all about China: The key to future US ties with South-east Asia​

Whether the next US president is Harris or Trump, that is the prism through which Washington will calibrate its ties. Three countries, including Singapore, stand out.​

Tan See Seng

President Xi Jinping’s China is a risen and assertive great power, one done with playing second fiddle to the United States. PHOTO: REUTERS

Nov 01, 2024

On Nov 5, Americans will pick their 47th president. For countries in South-east Asia, while it is unclear at this point who will emerge the winner, there’s one thing they can be certain of: whoever becomes president, China will be the prism through which Washington will view and engage with Asean and its constituent members.
Mr Xi Jinping’s China is a risen and assertive great power, one done with playing second fiddle to the United States. Mr Xi’s willingness to push back on several fronts is visibly evident, say, in his strategy to deny America access to the South China Sea, which Beijing proprietarily views as a Chinese lake.
The contention that the US should pursue ties with South-east Asia as a standalone good by itself no longer merits as much attention in US policy circles as it once did. Americans on both sides of the political aisle today are convinced that the US must necessarily counter Chinese power and influence. But what Americans have yet to achieve agreement on is how to go about it.
If Donald Trump regains the White House, he will likely reprise his protectionist-minded “America First” focus and resume his tariff war on China. For the record, Trump has expressed his belief that America does not need China for the former to remain the world’s top economy. But any viable strategy on China will require the broad support of US allies and partners and even international organisations. How the next Trump administration can successfully pull that off given his visceral dislike for, and continual disparagement of allies and institutions will be key.
If Vice-President Kamala Harris becomes president, she will continue President Joe Biden’s policy of keeping the United States at the forefront of global leadership and multilateral diplomacy. Further, she will work to keep the global commons free and open by opposing China’s efforts at building exclusive economic and technological blocs. Ms Harris is adamant that the United States must do all in its power to remain the principal rule-setter of the global system – a goal that China is unlikely to accept without a fight.
She is also expected to continue the policy of de-risking from China, that is, mitigating risks by diversifying supply chains. While less disruptive than the massive tariffs likely to emanate from a second Trump administration, this nuanced approach to trade relations could nonetheless hurt some Asean members such as Cambodia, Thailand and Vietnam as the US steps up efforts to stop third-party countries from being conduits of Chinese goods.
On geopolitical matters, what will a China-focused America mean for Asean?

Washington will unlikely do more with Asean than it is already doing because Asean’s neutrality offers little to its aims. Trump will personally ignore Asean as he did most multilateral organisations during his first term. Ms Harris will engage deeply but selectively with Asean. At the very least, Ms Harris is more likely to show up for Asean meetings in person – the high mark of Asean summitry success – than Trump ever did or would.
Both potential leaders – Trump more by default and Ms Harris by design – will focus on strengthening alliances and partnerships with specific South-east Asian countries that the US regards as critical to its China strategy. In this regard, three countries – the Philippines, Vietnam and Singapore – have emerged as the likeliest candidates.
This does not mean that the US will avoid other Asean countries, especially Indonesia, whose sheer size and de facto leadership in the region make it hard to ignore. To be clear, Washington will continue to cooperate to varying extents with all South-east Asian nations and Asean over a host of different areas. But Manila, Hanoi and Singapore stand out for their perceived relevance and responsiveness.
Indeed, the combined recent visits of US leaders to South-east Asia – Ms Harris in her vice-presidential capacity, Secretary of State Antony Blinken and Defence Secretary Lloyd Austin – have predominantly focused on those three countries. Manila, which hosted the largest-ever edition of the annual Balikatan military drills with the Americans this summer, is the recipient of a US$500 million (S$661 million) pledge in military aid from Washington.
Hanoi’s shared concern over Chinese assertiveness in the South China Sea led it and Washington to upgrade their bilateral ties to a “comprehensive strategic partnership”. Singapore is not a South China Sea claimant, but it has long been an active security partner of the US and seeks, amid concerns over China’s revisionist ambitions, to maintain a stable balance of power in the Indo-Pacific.
These developments underscore America’s emphasis on ties with selected South-east Asian partners on whom it could rely in its efforts to counter China. The key challenge for those states, whose default preference is to hedge rather than take sides in the US-China rivalry, will be on building and strengthening bilateral ties with either a Trump-led or Harris-led America without unnecessarily antagonising China.
Whether led by Trump or Ms Harris, there is no question that the United States will proactively take on China but in slightly different ways depending on who ends up in the White House. In either instance, South-east Asia stands to benefit if the Asean countries play their cards right, but it will be in terms of their perceived usefulness to America’s effort to counter China.

• Dr Tan See Seng is the president and chief executive of International Students Inc in the United States and concurrently research adviser at the S. Rajaratnam School of International Studies and senior associate at the Centre for Liberal Arts and Social Sciences at Nanyang Technological University.

 

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Is South-east Asia ready for Trump 2.0? Brace for much bigger economic impact​

No matter who wins the US election, the policy shifts could rewrite the rules for Asean. But the potential return of Donald Trump could compound this disruption.​

Deborah Kay Elms

The impact on South-east Asia will be stronger and sharper under a potential return of Donald Trump to the White House than under a President Kamala Harris. PHOTO: REUTERS

Nov 01, 2024

In the past, the contest to determine who sits in the White House was less relevant to policymakers or companies in Asean. Although the two American political parties – the Democrats and the Republicans – had policy differences, the overall approach to foreign and economic policymaking had been broadly consistent for decades.
In general, both sides looked to free markets and open trade. Both encouraged the spread of US business interests around the globe as another mechanism for supporting US policy objectives.
However, the upcoming US presidential election on Nov 5 is set to usher in a markedly different landscape, one that will impact economic and fiscal policy across South-east Asia. Regardless of who wins, the consequences will leave a lasting mark on this region, although the impact will be stronger and sharper under a potential return of Donald Trump to the White House than under a President Kamala Harris.
One has to go back to the 2016 election of Trump which changed the position of the US in important ways. The US became much more concerned about its own status than about ensuring that the economic and financial systems worked well for everyone. The Americans allowed a key part of the global trade regime at the World Trade Organisation, the system for handling disputes over trade rules, to wither away. Once the system for maintaining global trade rules was damaged, it became much easier to implement protectionist policies.
Trump then used a variety of domestic trade laws for managing national security and unfair trade practices against a wide array of countries, including against friends and allies. Many of these rules, drafted to manage trade during the Cold War, lay dormant for decades. Trump famously hiked US tariff rates, particularly against imports from China, by up to 25 per cent. The net result was a radically altered trade landscape by the time he left office.
Firms in Asia managed challenges arising from sudden shifts in US policies, and even found opportunities to land new investment from companies looking to avoid higher duties on goods destined for the US market.
The adjustment in policy to become more domestic oriented was not substantially altered by Trump’s successor, President Joe Biden. Although changes were less sudden, Mr Biden’s team pursued economic policies increasingly mingled with national security rationales under a “small yard, high fence” rubric.

As the Biden administration comes to a close, the yard has continued to expand in important ways, including new rules just in the last few weeks covering everything from outbound investment to connected cars.
Indeed, members of Congress from both parties have also provided increasingly strident support for a range of policies aimed at curbing China. Almost no one has offered up arguments for a return to free trade or open markets. Even the business community in Washington has gone largely silent about the consequences of new policy directions on overseas opportunities.
Partly as a result, no matter who wins the US election for president next week and under any configuration of Congress, US economic policy will continue to be focused on domestic issues with firms urged to reshore, onshore, or nearshore production; support US jobs; and encourage domestic manufacturing. There are few policy suggestions to further punish China, in particular, that would be viewed as a “step too far”.

Less favourable environment​

This overall setting means that the export-oriented economies across South-east Asia will face a less favourable environment going forward. There are likely to be plenty of opportunities, but the easy trade that powered regional growth and development will be harder to manage with significantly higher costs.
Firms will have to spend more on ensuring compliance with new and inconsistent obligations of all sorts. The decay of international rules and norms governing global trade means that governments will increasingly take actions that would have been off limits a few years ago. This includes a widening of protectionist policy actions under the guise of national security.
These actions will not just be limited to the United States. Indeed, once the rules of the road, so to speak, have been undermined by some of the most powerful players in the system, it is much easier for all participants to enact a wide range of previously unthinkable policies. Expect more justifications for closing markets related to security or climate change in the near term. Less global cooperation means more regulatory and legal conflict ahead.
While these trends are likely under both US presidential candidates, the potential return of Trump to the White House compounds the level of disruption for South-east Asia. His first administration was erratic, but many of the actual actions were comparatively restrained.

In a second term, he is preparing to implement fully his original agenda, which includes substantially increased tariffs against every country and at eye-watering levels against Chinese imports. He intends to run economic and fiscal policies directly out of the Oval Office, with little resistance from Congress or the Courts.
There seems to be a high level of complacency across much of this region about a Trump 2.0 administration. This is driven by the perception that he is “transactional” and that governments can simply make deals or engage in flattery to avoid the worst consequences of his economic policies.
This is a mistake. Trump has been completely consistent – over decades – about his protectionist instincts. In his view, he was constrained the last time in office from doing what he wanted by obstructionist officials at various levels of government. He will not be held back a second time.
Of course, some governments will try to make deals and may be successful. Trump cannot run for office again, so he is not looking to showcase his dealmaking. He has been extremely consistent in his own rallies about what he intends to do. He has repeatedly argued that tariffs are the “most beautiful word” precisely because he plans to use them often as a policy solution for nearly every kind of challenge.
Behind the scenes, Trump’s allies have been working on a range of new policy initiatives, including from the America First Policy Institute and the (currently discredited) Project 2025 from the Heritage Foundation. The set of proposed policies goes far beyond the application of tariffs and includes fiscal policies like dramatic changes to the Federal Reserve. These initiatives are meant to be implemented by a large cadre of officials drawn from outside the current systems, who are meant to show more loyalty to Trump.

Extremely challenging​

Erratic and uncertain policies from Washington will make it extremely challenging for firms and governments in South-east Asia. While the US does not represent the only market, it remains the destination of choice for a large proportion of goods and services exports from South-east Asia. Firms across the region are also reliant on a range of services and digital platforms from the US to power their local operations.
Companies that are hoping to somehow balance between the US and China and present a neutral location for investment or production may quickly be caught by impossible demands. To see what this might look like, consider the recent challenges faced by PVH Corporation, manufacturer of brands like Tommy Hilfiger and Calvin Klein. Under current US laws, firms are prohibited from using cotton from the Chinese province of Xinjiang over accusations of forced labour practices. However, China’s government recently launched an investigation into PVH for boycotting cotton from the region.
Firms in South-east Asia could be caught by similarly conflicting requirements, even if they are not currently producing or selling directly to either the US or China. The complicated sourcing, production, and distribution of goods and services across the region means that most companies are likely to draw on materials and services from one or both sides. The damage is likely to be felt by firms of all types and sizes, rather than being concentrated in a handful of sectors or industries.
Uncertainty emanating from the US will require the region to step up its own integration efforts to help mitigate some of the damage. While Asean has an admirable track record for pursuing ever closer cooperation, many of the commitments remain more theoretical. Managing chaos and disruption will require commitments to be implemented as intended, with genuine benefits to companies around the region. Given the high percentage of smaller firms that cannot easily manage rising costs of complexity, it is especially critical to ensure consistent application of trade and economic rules in the region.

• Deborah Kay Elms is head of trade policy at the Hinrich Foundation in Singapore. The foundation is an Asia-based philanthropic organisation that works to advance sustainable global trade.

 

[congo9]

Loong is no LKY calibre.
Looks like leaders of Singapore is looking foward to a 1st Female President.
But Reality is that Trump is winning the race.

 

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Asia and the Trump administration 2.0​

US-China relations and, more immediately, the people chosen to execute the president’s policies will be key to how countries in the region will be affected by Trump’s comeback.​

Chan Heng Chee

President-elect Donald Trump on election night in West Palm Beach, on Nov 5. Remarkably little was said about foreign policy during the campaign. PHOTO: NYTIMES

Nov 12, 2024

In this century, no election has been followed as intently throughout the world as the US presidential election of 2024. That it was so closely watched affirms, like it or not, that the United States is the decisive power globally, and can profoundly impact the direction of war and peace, alliances and partnerships, trade and investment, climate change and global governance. The choice for the American people was between two candidates, two different world views and who connected better with voters and their primary concerns.
Donald Trump reiterated his America First policy of the 2016 campaign and highlighted immigration and the economy as key issues. He repeatedly asked the voters: “Are you better off today than you were four years ago?” On Nov 5, he ushered in a red wave that’s almost certain to hand him a trifecta victory, a “grand slam”, for the Republicans with control over the presidency, the Senate and the House of Representatives, where vote counting has yet to be finalised at the time of writing. This makes Donald Trump, the 47th president of the United States, a very powerful person with an enabling Congress behind him. In addition, the Supreme Court now has a majority of Republican appointees.
What impact will a Donald Trump second term have for Asia?
Remarkably little was said about foreign policy during the campaign. This is not unusual as elections everywhere are almost always about domestic issues. As president, Trump is expected to be more focused internally. He promised sweeping changes to government institutions such as looking into dismantling the deep state and reducing bureaucracy, among other things. He is expected to turn to control of the borders early in his administration and implement the mass repatriation of illegal immigrants.
Leave aside Singapore and Asean which have been analysed, the great, major and middle powers of Asia have worked with a Trump administration before, so Trump 2.0 will not come as a sudden shock, but there will be immense anxieties over the direction of trade policy, security policies and the US-China relationship.

Impact on US-China relations​

Close attention will be paid to the relationship between the US and China because this bilateral relationship will set the tone for the security and stability of Asia. After an initial good start in 2017, based on the personal relationship between presidents Trump and Xi Jinping, a trade war ensued in 2018, followed by a tightening and scrutiny of technology exports to China. The US placed export controls and sanctions on China’s high-tech sector. The Biden administration did not lift the sanctions but became more systematic and targeted, launching a full-scale restriction on export of advanced chips to China and most certainly will cover other new technologies as well.
Will the second term of president Trump be different?

It is unlikely the US-China intense competition will reverse. It is a structural rivalry for dominance and will last for a very long time. There may be some movement at the edges, getting better then getting worse or much worse but the trajectory will not change fundamentally.
In his first term as president, Trump levied up to 25 per cent tariffs on some Chinese imports into the US. This time he has threatened to levy a 60 per cent tariff on China and 10-20 per cent tariffs on all imports from the rest of the world. Assuming this is a negotiating position, we may end up finally with something less; nonetheless this will gravely impact international trade, raise costs, trigger retaliation and promote contagious protectionism.
A US trade war with China will impact Asean countries as we have been part of the supply chain in the US-China trade. When sanctions were implemented against Chinese exports, Vietnam, Thailand and Malaysia became beneficiaries of the China +1 strategy adopted by Chinese companies and foreign companies in China. But there is talk that the Biden administration will tighten the export leaks and place sanctions on the diversified supply chain. It is very likely the Republican administration will take that up should the Biden administration not tighten the loophole.

On Taiwan , the “corest of core issues” for China, candidate Trump indicated he wants to maintain strategic ambiguity because it would give him a better negotiating position. He is reported to have said Taiwan “took almost 100 per cent of our chip industry” and would like to make Taiwan pay the US more for its defence. The uncertainty and the concerns about accidental conflict between the US and China in the Taiwan Strait are all still possible in the second Trump administration. However, it is said by many that Trump does not like war. Robert O’Brien, his national security adviser in the first term, recently reminded readers in Foreign Affairs, the renowned US journal, that president Trump did not start a new war in the four years he was in office.
On the South China Sea, the US position will not change with the new Trump administration. The Pentagon is clear that for the maintenance of peace and security in the region, it must continue to protect the freedom of navigation in the South China Sea, a role supported or implicitly supported by Asean countries, some of which are claimants and others maritime economies. In Trump’s first term, the US navy continued the Fonops (Freedom of Navigation Operations ) exercise begun under the Obama administration, but with less fanfare.

Japan​

Japan will strive to have the best relationship with the US no matter who is president. As a treaty ally whose security is underwritten by the US, Japan will be asked to contribute more towards its defence. The late Shinzo Abe enjoyed an exceptional relationship with then President Trump – the Japanese prime minister was the first world leader to call on the President-elect in November 2016. Japan has already taken seriously the US intention to be an offshore balancer and has been actively promoting a web of minilaterals and security cooperation with South Korea, Australia, the US and, lately, the Philippines to strengthen deterrence in the region.
Japan will be tracking closely the trade policy of the second Trump administration on tariffs and scrutiny on investments. A trade war between the US and China will impact Japan as China is its largest trading partner and among the top destinations for Japanese companies.

South Korea​

The concerns of South Korea, like Japan, are focused on trade and security. South Korea too will be asked to pay more for defence. Its major concern will be the Trump administration’s position on the Korean peninsula and how president Trump will deal with Kim Jong Un this time. The North Korean leader has a new ally in Russia, but in the end it is the US he will have to work with to get sanctions lifted. President Yoon Suk Yeol is more hardline on the North than his predecessor Moon Jae-in, so the situation is different. President Trump’s unpredictability will be an advantage in dealing with Mr Kim.

India​

India believes it will have no problems with a Trump presidency. Prime Minister Narendra Modi gets on well personally with both presidents Trump and Biden. The Indian leader is admired as a strong leader by both, but India does have a trade surplus with the US of around US$36.7 billion (S$48.8 billion). That can be easily handled in a friendly way as India is a member of the Quad and joined the first Trump administration to advance the Free and Open Indo Pacific strategy. India will be valued by any US administration as a hefty counter weight against China and differences with India have been overlooked by the Biden administration.

Australia and New Zealand​

The roundup of the region would be incomplete without considering Australia and New Zealand. Both are countries belonging to the Five Eyes, an Anglo sphere intelligence alliance, suggesting a very close security group. Both, like other treaty allies, are expected to make a bigger contribution for America’s protection.
Australia plays a more active and consequential role as a longstanding US ally joining in the US-led minilaterals to strengthen the security of the Indo-Pacific. It signed the Aukus trilateral agreement with the US and United Kingdom in 2024. We can expect Aukus to survive the Trump administration. Australia will be watching the US-China relationship closely as China is Australia’s largest two-way trading partner in 2023, accounting for 26 per cent of its global trade. US tariffs and sanctions against China would have an important impact on its trade. With large deposits of critical minerals, Australia is part of the vital supply chain for the US. Australia could lend its voice to speak out if a disastrous trade war should emerge hurting friends and allies of the US.
New Zealand has a different security relationship with the US. As a treaty ally it has had to work around its anti-nuclear policy although recently New Zealand has asked to participate in Aukus. New Zealand is a trading nation and would be concerned with Trump administration tariff plans against imported goods into the US.

Finally in trying to understand impact, it is important to remember the Washington saying that personnel is policy. The policy you get depends on who is holding the job in the team and in charge of the day-to-day management of policy. The president will set the direction and personally handle the policies that are most significant or matter most to him. He makes the final decision on war and peace. We will have to see who he appoints to his team for a more granular read of his policies. Asia is bracing itself for far-reaching changes but hopes for less disruptive consequences.

• Chan Heng Chee is Ambassador-at-Large and honorary professor of SUTD (Singapore University of Technology and Design).

 

[LITTLEREDDOT]

US looking if DeepSeek got Nvidia AI chips through Singapore, other countries: Source​

China’s DeepSeek last week launched a free assistant it says uses less data at a fraction of the cost of US models.PHOTO: REUTERS

Jan 31, 2025

NEW YORK – The US Commerce Department is looking into whether DeepSeek – the Chinese company whose AI model’s performance rocked the tech world – has been using US chips that are not allowed to be shipped to China, a person familiar with the matter said.

China’s DeepSeek last week launched a free assistant it says uses less data at a fraction of the cost of US models.

Within days, it became the most downloaded app in Apple’s App Store and stirred concerns about the United States’ lead in artificial intelligence, sparking a rout that wiped around US$1 trillion (S$1.35 trillion) off US technology stocks.

Current restrictions on Nvidia AI processors are meant to stop its most sophisticated chips from reaching China.

Organised AI chip smuggling to China has been tracked out of countries including Malaysia, Singapore and the United Arab Emirates, the source said.

The Commerce Department and DeepSeek did not immediately return requests for comment.

A Nvidia spokesman said its revenue from Singapore – which accounts for about 20 per cent of its total sales – does not suggest a diversion to China, according to a report in Investing.com on Nov 29.

Nvidia’s public filings report on the “bill to” locations of their customers, not the “ship to” locations. This implies that the company’s revenue figures are based on where their customers are billed, not where the products are ultimately shipped to, the spokesman said.

The spokesperson added that many of Nvidia’s customers have business entities in Singapore, which they use for products intended for the US and the West. This practice is common among companies operating in multiple countries and does not necessarily indicate that the products are being shipped to Singapore.

Nvidia also said it insists its business partners adhere to all relevant laws and will take appropriate action if it receives any information suggesting otherwise.

DeepSeek has said it used Nvidia’s H800 chips, which it could have legally purchased in 2023. Reuters could not determine whether DeepSeek has used other controlled chips that are not allowed to be shipped to China.

DeepSeek also apparently has Nvidia’s less powerful H20s, which can still lawfully be shipped to China. The US considered controlling them under the Biden administration and newly appointed Trump officials are discussing that as well.

The chief executive of AI company Anthropic, Mr Dario Amodei, said earlier this week, “it appears that a substantial fraction of DeepSeek‘s AI chip fleet consists of chips that haven’t been banned (but should be), chips that were shipped before they were banned; and some that seem very likely to have been smuggled”.

Two US lawmakers, who called on the Trump administration to curb exports of Nvidia’s H20 chips and those of similar sophistication, also urged tightening controls on shipments through third countries that pose a high risk of diversion, naming Singapore as an example.

In a letter to National Security Adviser Mike Waltz on Jan 29, Republican John Moolenaar and Democrat Raja Krishnamoorthi, who lead the House of Representatives Select Committee on China, said: “Countries like Singapore should be subject to strict licensing requirements absent a willingness to crack down on PRC transshipment through their territory.” REUTERS

 

[LITTLEREDDOT]

ST Explains: What Trump’s tariffs are, and how they could affect growth in Singapore and more​

Trump has branded the day "Liberation Day", though most economists expect US consumers to foot the costs. PHOTO: EPA-EFE

Kang Wan Chern
Apr 05, 2025

SINGAPORE - US President Donald Trump unveiled sweeping new tariffs on trading partners on April 2, calling them a declaration of economic independence and a move that will make America wealthy again.

Tariffs are taxes imposed on imported goods and used to regulate trade, protect domestic industries and generate revenue.

A fresh “baseline tariff” of 10 per cent will apply to all goods imported into the US from around the world, including Singapore, with steeper “reciprocal” tariffs on at least 60 trading partners that Mr Trump said slapped excessively high duties on American products.

“Reciprocal. That means they do it to us and we do it to them,” Mr Trump said at a Rose Garden event at the White House on April 2.

During that speech, Mr Trump defended all of his tariffs as “kind”, saying the taxes are lower than the tariffs and other trade barriers other countries impose on imports from the US.

How will Trump’s tariffs impact Singapore?​

Singapore imposes no tariffs on US products under the US-Singapore Free Trade Agreement (USSFTA). It also imports more from the US than it exports.

In that light, goods exported to the US from Singapore appear to be subject to the minimum 10 per cent tariffs being imposed by Mr Trump, which are set to take effect at the start of April 5.


Certain goods, like pharmaceuticals and semiconductors, which are key exports for Singapore, are on a small list of products that are currently spared from the new tariffs.

Still, imposing a 10 per cent tariff on Singapore’s exports to the US is a violation of the USSFTA, which includes the elimination of tariffs between the two countries, making trade in nearly all US and Singaporean goods duty-free.

But further levies might be on the way.

Maybank economist Chua Hak Bin warned that the exemption from tariffs on pharmaceuticals and semiconductors will not last long.

“Clearly, Trump has not made a tariff decision on semiconductors as well as pharmaceuticals, which are both important to Singapore’s manufacturing share and export share.

“I don’t think they will be zero,” he said, adding that he expects an announcement on further tariffs to currently exempted goods by the end of April or early May.

There could also be further tariffs “stacked on top of the 10 per cent baseline rate that has been introduced for Singapore”, he said.

While this will not place Singapore at a competitive disadvantage to its neighbours, as the tariffs will likely be imposed across the board, Maybank will nonetheless be downgrading its growth forecasts for Singapore, Dr Chua said.

Semiconductors, which account for about 30 per cent of the Republic’s annual exports, and pharmaceuticals, which represent 8.3 per cent, will likely be the industries hardest hit.

Dr Deborah Elms, head of trade policy at the Hinrich Foundation, said exempted goods “are going to be whacked with Section 232 tariffs very soon. These could be higher than reciprocal tariffs”.

Section 232 tariffs are US trade tariffs imposed on imports for national security reasons under Section 232 of the Trade Expansion Act of 1962. These tariffs allow the US government to restrict imports if they are deemed to threaten national security.

​

 

[LITTLEREDDOT]

PM Wong on 3 implications US tariffs have on global trading system​

PM Lawrence Wong said the tariffs imposed by US President Donald Trump have three wider implications for the global trading system and the world economy.ST PHOTO: KUA CHEE SIONG
Wong Pei Ting
Apr 08, 2025

SINGAPORE – The sweeping tariffs imposed by US President Donald Trump on countries around the world have consequences that extend far beyond economics, even as business and consumer confidence has already taken a hit.

Prime Minister Lawrence Wong told Parliament on April 8 that while the tariffs themselves are already damaging, this new wave of protectionism is unpredictable and unstable, with businesses likely to hold back on investments.

“Protectionism is already bad, unstable protectionism is even worse,” he said.

“All this creates an environment of deep uncertainty – one that could tip both the US and global economy into recession,” he added.

PM Wong said the tariffs have three wider implications for the global trading system and the world economy.

1. ‘Reciprocal’ tariffs a fundamental rejection of WTO rules​

The US’ new tariff regime is a complete repudiation of the Most Favoured Nation (MFN) principle, one of the cornerstones of the World Trade Organisation’s (WTO) multilateral trading system, said PM Wong.

Laying out why the MFN is important, he said the principle might sound like it gives certain nations special privileges, but it is in fact the opposite – every member must treat all other members equally.

In other words, if a country extends more favourable terms or imposes additional restrictions on one trading partner, it must do the same to all other WTO members, PM Wong stated.

“(The tariffs) open the door to selective country-by-country trade relationships, based on unilateral preferences,” he said.

While he noted that there are some carve-outs and exceptions to the MFN rule, for example to allow free trade agreements, the MFN principle has long been the bedrock of the multilateral trading system, PM Wong said.

“It ensures a level playing field, prevents discrimination, and enables countries – big or small – to compete fairly in global markets,” he added. “This has helped to liberalise trade amongst more than a hundred WTO members, each with different economic, and political and social concerns.”

If other countries adopt the same approach as the US, the rules-based trading system will unravel, warned PM Wong.

Such an unravelling will spell trouble for all nations, especially smaller countries like Singapore, which will face more pressures, he said.

“Small countries have limited bargaining power in one-on-one bilateral negotiations, so the major powers will dictate the terms, and we risk being marginalised and sidelined,” he said.

2. Likelihood of a full-blown global trade war is growing​

This round of tariff increases by the US may just be the beginning of more increases to come globally, PM Wong said, adding: “We’ve seen this play out before.”

In 1930, when the US enacted sweeping tariff increases through the Smoot-Hawley Tariff Act, many countries protested, and a number of them retaliated with their own trade restrictions and tariffs. This deepened and extended the Great Depression, he noted.

Today’s risks may be greater in some ways, PM Wong then said.

The new US tariffs, if fully enacted, are higher than the ones in Smoot-Hawley, he noted. Trade today is also a much bigger part of the American and global economy compared to the 1930s, with supply chains being more interconnected than before, he added.

Any disruption to present-day trade flows will therefore have wider knock-on effects on the world, he said.

PM Wong said that some think the new tariffs are a negotiation tool by the US to extract concessions in other areas, mirroring what US President Richard Nixon did in 1971.

The then US President had slapped a 10 per cent surcharge on imports to pressure Germany and Japan to devalue their currencies, and when that was accomplished, the tariffs came off.

While there is a brief window for countries to negotiate and get some reprieve from the US before their higher tariff rates take effect, and there is possibility for some of the rates to be lowered, PM Wong said people have to be realistic.

“Once trade barriers go up, they tend to stay up. Rolling them back is much harder, even after the original rationale no longer applies,” he said.

“Even if some partial accommodations are eventually worked out, the uncertainty generated by such a drastic move will dampen global confidence. It will be very hard to restore the previous status quo.”

In particular, it does not look like the 10 per cent universal rate is open for negotiation, he added, and that this looked like the fixed minimum tariff, regardless of a country’s trade balance or existing trade arrangements with the US.

PM Wong also flagged the US-China relationship as a major concern.

The US views China as a strategic competitor that must be dealt with now, while China has said it is ready for a “tariff war, a trade war, or any other type of war”, he noted.

Neither side looks to be backing down for now, and the latest development is the US has threatened an additional 50 per cent tariff on China.

PM Wong noted that compared to the past, the two powers now have fewer channels for dialogue, which can serve as guard rails to manage the relationship.

“If the disputes escalate and destabilise US-China relations, the consequences for the world would be disastrous,” he said.

3. Rising ‘me first’, win-lose mindset in global economy​

Beyond the economic impact, the US tariffs look to be a harbinger of greater protectionism, noted PM Wong.

“More and more, countries are turning away from win-win cooperation and deeper integration,” he said.

“Instead, we see a rising ‘me first’, win-lose mindset – where it’s every country for itself. Some are even prepared to use aggressive or coercive means to get what they want at the expense of others.”

Meanwhile, global institutions are getting weaker, and longstanding norms of cooperation are breaking down, he said.

While it is too early to tell how the sharp, negative reactions in global stock markets over the past few days will spill into the real economy, the downside risks are clearly rising, he said.

“What’s troubling is not just the tariffs themselves – which are already damaging – but the fact that this new wave of protectionism is unpredictable and unstable,” he said.

The result is business and consumer confidence has been hit, and international trade and investments will suffer, he said.

PM Wong said that in the wake of the tariff announcement, Singapore’s economic agencies have been in touch with several multinational enterprises and local businesses.

The sense they have is that even those who are not directly affected by the tariffs are worried about weakening demand from their customers, and some firms have put new projects on hold while they assess the full implications of the tariffs.

PM Wong said Singaporeans must be mentally prepared, as the predictable and rules-based order they once knew is fading.

“The new era will be more volatile, with more frequent and unpredictable shocks,” he said.

​

 

[LITTLEREDDOT]

US tariffs: Safeguarding Singapore in a new and dangerous era​

The Trump administration’s ‘Liberation Day’ tariffs underscore the grim reality that the era of rules-based globalisation and free trade is over. Prime Minister Lawrence Wong spelt out the implications in Parliament on April 8. The transcript of his ministerial statement follows:​

Lawrence Wong

A new task force will be set up to help businesses and workers address the immediate uncertainties, strengthen their resilience, and better adapt to the new economic environment.ST PHOTO: LIM YAOHUI
Apr 09, 2025

We have known for some time that the world is in flux. The familiar signposts are fading. But the contours of a new global system have yet to take shape.

So we are in a period of transition – uncertain, unsettled and increasingly unstable.

The recent “Liberation Day” tariff announcements by the US confirm this stark reality: The era of rules-based globalisation and free trade is over.

This marks a profound turning point. We are entering a new phase in global affairs – one that is more arbitrary, protectionist and dangerous.

For nearly 80 years since the end of World War II, America was the anchor for the free-market economies of the world. It championed free trade and open markets, and led efforts to build a multilateral trading system.

This World Trade Organisation (WTO) system ushered in decades of global growth and stability. It allowed trade to flourish and lifted millions out of poverty. It benefited the world – and contributed to America’s own economic strength.

And objectively, America continues to enjoy unrivalled economic heft. In fact, the US rebounded more quickly than other advanced economies from the Covid pandemic; it has surged ahead of all its major competitors in the advanced industrial world.


But not all Americans feel this way about their economy. There are hollowed-out towns in what was once America’s thriving industrial belt. There are workers whose jobs have disappeared, and those whose incomes have stagnated. They believe that the American economy is fundamentally broken.

Discontent was already visible in the 1990s, when protesters disrupted the WTO meeting in Seattle.

Frustrations deepened following the global financial crisis of 2008, and more recently, after the Covid pandemic.

To be clear, the global economic system is in need of reform. Singapore and many others have called for changes. And we have been working with like-minded countries and partners at the WTO to reform its processes.

A key concern in America is China – the sense that the US had given away too much in allowing China to join the WTO; and that China competes on an unfair basis, for example, by heavily subsidising its own companies, putting up non-tariff barriers, and restricting market access to US firms.

These concerns should be addressed within the WTO framework.

In particular, the trade arrangements and concessions made in the past when China was only 5 per cent of the world’s economy should be updated when China now makes up 15 per cent of the world’s gross domestic product (GDP). And if there are disagreements, they should be resolved through the WTO’s dispute settlement system, which has been paralysed, and urgently needs to be restored and reformed.

US tariff implications​

But what the US is doing now is not reform. It is rejecting the very system it created.

The US has imposed a blanket 10 per cent tariff on imports for nearly all countries. On top of that, it has layered on higher tariffs – up to 50 per cent – for selected countries, especially those that run a trade surplus with the US.

According to the administration, the sweeping tariffs are needed to fix America’s trade imbalances. But there is nothing inherently wrong about running a trade deficit. It simply means that American consumers are buying more from the world, than the world is buying from America.

Moreover, the focus has been solely on the goods trade. That only gives a partial picture. In fact, the US runs a surplus with many of its trading partners in services – exporting software services, education, entertainment, financial and business services. But this fact has been completely ignored.

In Singapore’s case, we have an FTA (free trade agreement) with America. We impose zero tariffs on US imports, and we actually run a trade deficit with the US – meaning we buy more from them than they do from us.

If the tariffs were truly reciprocal, and if they were meant to target only those with trade surpluses, then the tariff for Singapore should be zero.

But still we are being subjected to the 10 per cent tariff. We are very disappointed by the US move, especially considering the deep and longstanding friendship between our two countries. These are not actions one does to a friend.

Asia bears the brunt of the US tariff increases.

Within the region, China is the hardest hit – facing a 34 per cent tariff this round. And this is on top of the 20 per cent tariff increase imposed over the last two months, and the 20 per cent from the first Trump administration. So taken together, the average US tariff on Chinese products now exceeds 60 per cent. In South-east Asia, the tariff rates range from 10 per cent to 49 per cent. These measures will accelerate the fracturing of the global economy.

Instead of flowing based on economic efficiency, capital and trade will increasingly be diverted based on political alignment and strategic considerations.

Several members have asked about the impact of the tariffs on specific industries in Singapore. We are assessing the situation carefully. But our deeper worry is not the direct impact that these businesses face. It is the wider implications for the global trading system and the world economy. So let me explain.

Rejection of WTO rules​

First, the “reciprocal” tariffs are a fundamental rejection of the WTO rules.

One of the cornerstones of the WTO multilateral trading system is the Most Favoured Nation (MFN) principle. Most Favoured Nation sounds like giving special privileges. Actually, it means the opposite: that every member must treat all other members equally. In other words, if a country extends more favourable terms to or imposes additional restrictions on one trading partner, it must do the same to all other WTO members.

There are some carve-outs and exceptions to the MFN rule, for example to allow free trade agreements. But MFN has long been the bedrock of the multilateral trading system. It ensures a level playing field, prevents discrimination, and enables countries – big or small – to compete fairly in global markets. This has helped to liberalise trade amongst more than a hundred WTO members, each with different economic, and political and social concerns.

America’s new tariff regime is a complete repudiation of the MFN principle. It opens the door to selective country-by-country trade relationships, based on unilateral preferences.

If other countries adopt the same approach as the US, the rules-based trading system will unravel. This will spell trouble for all nations. But smaller countries like Singapore will face greater pressures. Because small countries have limited bargaining power in one-on-one bilateral negotiations. So the major powers will dictate the terms, and we risk being marginalised and sidelined.

Risks of a global trade war​

Second, the likelihood of a full-blown global trade war is growing.

Singapore has decided not to impose retaliatory tariffs. Doing so will only lead to increased costs for Singaporeans. But other countries may not be guided by the same considerations and may have different perceptions and views.

China has already imposed retaliatory tariffs on US goods. Others, like the European Union, are considering their next steps.

Some think that the new tariffs are a negotiating tactic – a negotiating tool by the US to extract concessions in other areas. This was what President Richard Nixon did in 1971 – he slapped a 10 per cent surcharge on imports to pressure Germany and Japan to devalue their currencies, and when they did, the tariffs came off.

Indeed, there is a brief window for countries to negotiate and get some reprieve from the US before the higher tariff rates take effect, and it may be possible for some rates to be lowered.

But we have to be realistic. Once trade barriers go up, they tend to stay up. Rolling them back is much harder, even after the original rationale no longer applies.

Even if some partial accommodations are eventually worked out, the uncertainty generated by such a drastic move will dampen global confidence and growth. It will be very hard to restore the previous status quo.

And in particular, it does not look like the 10 per cent universal rate is open for negotiation. This seems to be the fixed minimum tariff, regardless of a country’s trade balance or existing trade arrangements.

Furthermore, there are other forces that could maintain the momentum for tariffs.

In particular, many European countries are eager to protect their critical industries like electric vehicles, green technologies and semiconductors from Chinese competition. They do not want to be a dumping ground for exports from China or other countries.

There is also a growing push across the West to strengthen their domestic manufacturing capabilities and reduce dependence on global supply chains, especially in strategic industries.

So this round of tariff increases by the US may just be the beginning of more increases to come globally. And we have seen this play out before.

The US enacted sweeping tariff increases through the Smoot-Hawley Act in 1930. Many countries protested, and a number retaliated with their own trade restrictions and tariffs. This deepened and extended the Great Depression.

In some ways, today’s risks may be greater.

The new US tariffs, if fully enacted, are higher than the ones in Smoot-Hawley. Trade is now a much bigger part of the American and global economy compared with the 1930s. Supply chains are also more deeply connected than they were back then. Any disruption to trade flows will have wider knock-on effects on the world.

This brings me to the third point, which is the impact on the global economy.

Battered business confidence​

Business and consumer confidence has already been hit by the tariffs. International trade and investments will suffer.

Our economic agencies got in touch with several multinational enterprises and local businesses after the tariff announcement. Even those who were not directly affected by the tariffs are worried about weakening demand from their consumers. Some have put new projects on hold while they assess the full implications of the tariffs.

These are reactions from companies based here. But I am sure the same conversations are happening in boardrooms elsewhere.

Over the recent days, we have seen sharp negative reactions in global stock markets. It is too early to tell if all this will spill over into the real economy.

But the downside risks are clearly rising.

What is troubling is not just the tariffs themselves – which are already damaging – but the fact that this new wave of protectionism is unpredictable and unstable. Protectionism is already bad – unstable protectionism is even worse.

Businesses do not know what to expect. Many are holding back, fearful that changing rules will leave them with stranded assets. And all this creates an environment of deep uncertainty – one that could tip both the US and global economy into recession.

The consequences extend far beyond economics.

More and more, countries are turning away from win-win cooperation and deeper integration. Instead, we see a rising “me first”, win-lose mindset – where it is every country for itself. Some are even prepared to use aggressive or coercive means to get what they want at the expense of others.

Meanwhile, global institutions are getting weaker, and longstanding norms of cooperation are breaking down.

US-China disputes​

One major concern is the US-China relationship. America views China as a strategic competitor and threat, which must be dealt with now while America still has the advantage. China says it is ready for a tariff war, a trade war, or any other type of war. The US has now threatened an extra 50 per cent tariff on China, and China says it will fight till the end.

There are fewer channels for dialogue, which can serve as guard rails to manage the relationship. So if the disputes escalate and destabilise the US-China relationship, the consequences for the world would be disastrous.

We must be mentally prepared. The predictable and rules-based order we once knew is fading. The new era will be more volatile, with more frequent and unpredictable shocks. We must be ready to stand firm, and protect our interests, no matter how the external winds may blow.

What does all this mean for Singapore?

Outlook for Singapore​

In the near term, we expect weaker global growth, which means external demand for our goods and services will fall.

The outward-oriented sectors of our economy will suffer the brunt of the impact. They include manufacturing, especially segments like electronics and semiconductors; biomedical science, which have higher export exposure to the US. Wholesale trade and transport will be impacted. The global uncertainty and dampened sentiments will also impact some services industries, including finance and insurance.

Singapore may or may not go into recession this year. But I have no doubt that our growth will be significantly impacted.

We had originally projected GDP growth of 1 to 3 per cent for 2025. MTI (the Ministry of Trade and Industry) is reassessing the growth forecast, and will likely revise it downwards.

Slower growth will mean fewer job opportunities and smaller wage increases for workers. And if more companies face difficulties or relocate their operations back to the US, there will be higher retrenchments and job losses.

For now, the measures announced in this year’s Budget will provide support for any short-term strain.

We have a comprehensive package of measures for households and individuals. They will receive CDC vouchers, SG60 vouchers and U-Save rebates to help with their cost of living. And there are targeted measures like increased ComCare Assistance for the more vulnerable groups.

We are also supporting workers through investments in SkillsFuture. And those who find themselves involuntarily unemployed will receive help to get back on their feet through the SkillsFuture Jobseeker Support which will start later this month.

We have also rolled out measures in the Budget to help businesses – there are short-term support measures through corporate income tax rebates, as well as schemes to boost their productivity and competitiveness, and to pivot to new markets. Our economic agencies are also engaging the firms impacted by the tariffs to better understand their responses, and see how we can support them, and assist them with any specific issues they face.

Nevertheless, the situation is fluid and can change quickly.

Adapting to new realities​

We will therefore set up a task force chaired by Deputy Prime Minister Gan Kim Yong to help businesses and workers address the immediate uncertainties, strengthen their resilience, and better adapt to the new economic environment.

In addition to our economic agencies, the task force will include the Singapore Business Federation, the Singapore National Employers Federation, and NTUC.

We will continue to monitor developments closely. The Government stands ready to do more, if and when necessary. We have the resources to do so because of the financial discipline and prudence we have exercised over the decades.

In this new environment, Singapore must redouble our efforts to remain a key node in global flows, and a trusted business hub. We will forge closer links with like-minded partners who share our commitment to open and free trade.

The US may have decided to turn protectionist. But the rest of the world does not have to follow the same path. We will identify other partners to join us and work around this – to ensure resilience and maintain critical parts of the multilateral system, while laying the foundations for a possible new and different global system that can be achievable later.

And this is why I have made the effort to engage and visit my counterparts in different countries. I touched base with UK Prime Minister Keir Starmer yesterday and have a few more conversations lined up in the coming weeks. They are all keen to do more with Singapore, and to expand our economic cooperation including in new areas like the digital and green economies.

In particular, we will strengthen our collaboration and integration within Asean.

Last Friday, I spoke with Malaysian Prime Minister Anwar Ibrahim. Malaysia is the Asean chair this year. We agreed to accelerate Asean’s integration efforts to make our region more attractive and competitive.

A Special Asean Economic Ministers’ Meeting will be convened later this week. They will discuss further ways that Asean can work together to strengthen intra-Asean trade, and to send a strong signal of Asean’s commitment to regional economic integration.

As a group, Asean will also continue to strengthen our links with like-minded partners in areas of mutual interest.

Mr Speaker, we are entering a changed world. The only way Singapore can make it through the gathering storm is to stay united – pool our resources, our resilience and our resolve.

The Government will do everything we can to steer Singapore through the choppy waters, and make sure no one is left behind. We will keep our economy open, our society cohesive and our institutions strong.

We will create new value propositions for businesses and investors.

We will act boldly and decisively, when needed, to ensure Singapore continues to succeed.

Above all, we will put the interests of Singapore and Singaporeans at the centre of everything we do.

The road ahead will be harder. The dangers are real. But so too is our determination. In many ways, we are in a better position than we were 60 years ago when we became independent.

We have built deep reserves as a strategic buffer. We have forged a strong compact, built on solidarity and trust in each other. And most of all, we have our ingenuity and wit, our grit and gumption – a “never say die” spirit that has seen us through every crisis, and will carry us through the ones to come.

So Mr Speaker, I say to this House and to fellow Singaporeans – do not fear. Now, more than ever, we will stay resolute and united. Our little red dot will continue to shine. In a dark and troubled world, Singapore will hold our ground as a beacon of stability, purpose and hope.

 

[LITTLEREDDOT]

Massive challenge for new national task force as Singapore walks tariff tightrope​

The impact on jobs, wages and confidence will be unpredictable. Weathering the storm will require all hands on deck and all tools at its disposal.​

Selena Ling

The impact of US President Donald Trump’s “Liberation Day” tariffs on jobs, wages and confidence will be unpredictable.PHOTO: ST FILE
PUBLISHED Apr 09, 2025, 05:00 PM

It has been about two years since Singapore’s Covid-19 multi-ministry task force stood down after steering the country through the pandemic.

In Parliament on April 8, Prime Minister Lawrence Wong announced a new national task force to help the country navigate another global crisis.

The task force, chaired by Deputy Prime Minister Gan Kim Yong, will aim to address immediate uncertainties after US President Donald Trump’s “Liberation Day” tariff announcements on April 2. It will include representatives from Singapore’s economic agencies as well as the Singapore Business Federation, Singapore National Employers Federation and the National Trades Union Congress.

As the global economy continues to reel from the tariffs, tensions have only escalated with the US imposing an additional 50 per cent tariff on China, in response to China’s retaliatory tariff and fiery rhetoric that it will “fight to the end”. Europe, too, is mulling over a response.

In addressing the impact of the tariff announcements on Singapore, PM Wong put it plainly that “the era of rules-based globalisation and free trade is over”.

“This marks a profound turning point. We are entering a new phase in global affairs – one that is more arbitrary, protectionist and dangerous,” he added.

As the global economy enters uncharted waters once again, how deep will the damage go and what will be the priorities for the task force in helping Singapore businesses to stay afloat?

The impact unfolds​

In the short term, the labour market could face a double-edged sword – domestic industries and reshoring activities may boost employment, given that the 10 per cent tariffs on Singapore’s exports to the US is relatively mild compared with some of its regional peers’. But jobs in export-dependent sectors caught up in the possible retaliatory whirlwind could suffer.

With the tariffs expected to create ripple effects across global markets, we could see businesses turning more cautious and delay investments and hiring, which could directly impact Singaporean workers, particularly in sectors heavily reliant on exports to the US market. For example, a local electronics manufacturer that relies heavily on exporting components to the US may decide to postpone its expansion plans and freeze hiring due to increased costs and unpredictability in demand. Or consider the domestic food and beverage industry which is highly sensitive to economic downturns – a downshift in consumer confidence could prompt belt-tightening on household spending.

Contract workers and those in trade-related industries could also be particularly vulnerable. If companies’ profit margins are hurt by higher tariffs, they could also restrain salary increments or narrow bonuses as a precautionary measure.

Concerns also extend to the construction sector. Building materials such as steel and even timber are under scrutiny and may lead to increased cost volatility, potentially affecting housing prices and infrastructure projects. Builders and contractors may be caught wrong-footed in existing projects that they have bid for, having failed to anticipate – or fully hedge against – the wild price swings across copper, iron ore, aluminium and steel. Notably, the UK government is now considering nationalising British Steel amid fears that it could run out of raw materials within days.

Mr Trump has also announced that the US would soon announce a “major” tariff on pharmaceuticals, to incentivise drug companies to shift their operations to the US. Tariffs could reshape the highly integrated global supply chains that Singapore relies on for raw materials and intermediate goods, potentially causing bottlenecks, delays, inefficiencies or higher input prices. This could even undermine Singapore’s reputation as a high-quality, reliable manufacturing hub.

Tariffs on pharmaceutical imports or exports could raise costs for companies based in Singapore, making drugs more expensive to produce or sell overseas, impacting the competitiveness of the active pharmaceutical ingredients produced here. Uncertainty around tariffs may also make pharmaceutical companies hesitate to invest or expand operations, including in Singapore.

There have been no other specific sectoral tariffs on the semiconductor industry announced for now, but companies relying on Asian assembly hubs may be pre-empting the rising threat. Frontloading of intermediate components and stockpiling additional inventory are likely precautionary measures to forestall any potential short-term disruptions in the supply chain pending fresh tariffs.

For businesses, the struggle to diversify supply chains may lead to operational challenges. And as they seek to insulate themselves from tariff impacts, the competitive landscape may shift, potentially resulting in higher prices for goods as intermediate goods criss-cross borders in a highly integrated trading world.

At this stage, US tariffs could potentially be disinflationary for the rest of the world including Singapore, if China and other major exporters shift their goods to serve other markets outside of the US.

With the ratcheting up in US tariffs on China to 104 per cent from April 9 and China vowing to fight back, the concern over economic spillover effects to other players in the global/regional supply chains is mounting.

The task unfolds​

In this volatile and fractious global environment, Singapore’s economic resilience will hinge on its ability to adapt to shifting trade flows, capitalise on supply chain diversification away from heavily tariffed countries, and navigate broader economic uncertainties and financial market volatility.

That said, we can expect some indirect impact from knock-on effects due to our roles as trading, logistics and financial hubs. There could also be a dampening of foreign direct investments until the tariff uncertainties clear. The new national task force will need to consider how small and medium-sized enterprises – already struggling with elevated costs and manpower challenges – can weather weakened demand and volatile market conditions. Support for supply chain diversification, ecosystem development, internationalisation, and access to alternative markets will remain key pillars of economic resilience.

While the task force is aimed at helping businesses navigate the immediate challenges, its role is likely to be prolonged and may well expand in scope. Jobs would remain at the top of mind given the expectation that they might be impacted in the medium to long term. While the overall unemployment rate stood at a low 2 per cent in 2024, job insecurity persists among Singaporeans. The tariffs will do little to assuage that, and will likely even dredge up fresh cost-of-living anxieties.

Already, the 2025 Budget announced earlier focused on long-term investment in workforce skills and lifelong education, to ensure that households are better equipped to cope with future economic shocks. It also looked at strengthening social safety nets and support systems, in areas such as housing, education and healthcare. I anticipate that part of the purview of the task force will be to review whether the existing approach is sufficient or requires supplementation with more targeted policies.


Turning to the direct financial support measures provided by the 2025 Budget, it is worth noting that these are temporary in nature, designed to provide immediate relief for current cost-of-living anxieties. There is a need for long-term initiatives that address the root causes of household insecurities, which I anticipate the task force will explore. We can take heart that there is fiscal room to lend support to Singapore businesses and households if economic conditions deteriorate as a result of the US tariffs. Yet, this will have to be balanced against future revenue generation and economic growth.

Although PM Wong indicated that there “may or may not” be a recession this year, a downgrade of the official 2025 GDP growth forecast is also likely on the cards from the original 1 to 3 per cent to possibly 0 to 2 per cent. Our house forecast of 2.1 per cent is clearly subject to downside risks if global trade tensions escalate further and financial market volatility persists.

The silver lining is that Singapore still has ample policy room to support growth if more downside risks materialise. For the upcoming monetary policy statement on April 14, the Monetary Authority of Singapore could be looking to ease policy, potentially through another S$Neer (Singapore dollar nominal effective exchange rate) slope flattening given subsiding core inflation.

The new era of trade challenges​

The global order as we know it is no longer. For a small nation like Singapore, which has always been a supporter of a rules-based global community, the reciprocal tariffs are deeply troubling.

In the short term, there may be heightened uncertainties as we await the retaliatory responses of other countries and their negotiations with the US, before we see the final tariff outcome. In the medium term, there could be some diversification and reduced reliance on the US as a market if the tariffs cannot be negotiated away.

The task force, alongside policy agencies, will have an important role to play in ensuring that Singapore remains attractive to foreign direct investments, capital flows and talent to ensure Singapore sustains its economic dynamism.

It is crucial for businesses to remain alert to opportunities and be proactive, as I anticipate that policymakers throughout Asean will look to strengthen relationships with friendly partners, collaborate on trade agreements and economic initiatives and lessen dependence on the US market. These new agreements could help cushion the blow of external shocks. CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership), RCEP (Regional Comprehensive Economic Partnership), Brics+ and other alphabet soup agreements outside the purview of the US will be increasingly looked at as viable alternatives to being held to tariff ransom.

One thing is clear in this new age – adaptability and resilience will be key to thriving amid uncertainty and volatility. Singapore in its 60 years of nationhood has weathered many economic storms before and the theme of unity forged by adversity remains true as the fiercest storms sow the strongest roots.

​

 

[k1976]

A new survey has found that four in 10 Singaporean voters would vote for the ruling People’s Action Party (PAP) if the election were held tomorrow, while most have not decided who to vote for.


The poll of 1,845 citizens aged 21 and above, conducted between March 25 and April 1 by market research company YouGov, found that 44 per cent of respondents have decided which party they will vote for.


Nineteen per cent said they were undecided, 13 per cent were “leaning towards a particular party but remain open to change”, 11 per cent said they would make their decision during the campaign period, and 3 per cent said they would decide at the voting booth.


The survey, released on Tuesday, comes with Singapore expected to announce a date soon for the general election. Prime Minister Lawrence Wong has yet to dissolve parliament but the legal deadline to hold the election is November this year.

 

[k1976]

That is the multi polar world global theme for at least a super cycle

 

[k1976]

Pls rest assured with Good Hands….-All will be 万福金安

 

[k1976]

Singapore’s ruling People’s Action Party tops poll ahead of vote​

Bloomberg
Tue, 8 April 2025 at 2:13 PM SGT1-min read

Singapore’s PAP could secure at least 40% of votes if a general election were held tomorrow, according to a YouGov survey. (Photographer: Nicky Loh/Bloomberg)
By Nurin Sofia

(Bloomberg) – Singapore’s People’s Action Party, which has been in power for the past 60 years, could secure at least 40% of votes if a general election were held tomorrow, according to a YouGov survey.

About 12% of respondents said they would pick Workers’ Party, the leading opposition group. The Singapore People’s Party, Singapore Democratic Party, National Solidarity Party and Progress Singapore Party would each garner 1% of the votes, according to the poll conducted from March 25 to April 1 and released on Tuesday.

Of the 1,845 Singaporeans polled, 29% would rather not disclose their preference and another 13% were undecided on their party of choice.