SINGAPORE: The tit-for-tat tariffs between the US and China have had "limited" negative impact on Singapore’s economy as they affect only a “modest share” of the country’s exports, said Minister for Trade and Industry Chan Chun Sing in Parliament on Friday (May 18).
An analysis by his ministry estimated that about 0.09 per cent of Singapore’s domestic exports could be directly affected by the trade tariffs, Mr Chan said.
Still, the Government is closely monitoring developments, particularly for any indirect impact on firms and workers over the longer term, he said. Economic agencies are also in close contact with companies that may be affected.
Mr Chan, who took over the helm at the Ministry of Trade and Industry (MTI) this month following the latest Cabinet reshuffle, said he has also called for an in-depth study to be done on the possible implications of a trade war.
One direct implication is rising costs for businesses, but even if tariffs are not targeted at Singapore, there could also be a "knock-on impact" as global trade flows shift, he said.
Tariffs targeted at other countries affect the trade flows between and among these countries, which could also affect Singapore, he explained in his reply to a question from West Coast GRC Member of Parliament Patrick Tay.
“Whether it’s positive, negative or to what extent, we will need to study this carefully," he said.
“It requires us to review our economic models to make sure we understand the shifts in the trade flows and ask ourselves what other actions do we need to ... safeguard ourselves from these uncertainties.”
For instance, Singapore can not become overly dependent on any particular market and must continue to “expand and diversify”, he said.
Earlier this year, US President Donald Trump announced tariffs on varying items including steel, aluminium and solar panels – aimed chiefly at China and has threatened more on other Chinese goods.
In retaliation, China announced a list of counter-tariffs on a variety of US exports, such as crops and aircraft.
A Chinese delegation is currently in Washington for talks with top US administration officials, following a separate round of negotiations in Beijing earlier this month.
Mr Chan said Singapore has registered its concerns with US and China, and continues to engage the relevant departments.
With the country being a strong proponent of free trade and supporter of the rules-based multilateral trading system, Singapore remains concerned that an "escalating cycle of expanding unilateral tariff measures will result in negative spill-over effects on global supply chains".
“Any disruption to global trade flows or trade volumes will affect big and small economies alike. We hope that countries will exercise restraint and avoid further escalation of tensions," he said.