Singapore Faces $3.1 Billion in Pharmaceutical Export Risk as U.S. Tariffs Loom
Singapore is bracing for potential disruption to $3.1 billion in pharmaceutical exports as the United States considers maintaining or increasing tariffs, despite a free trade agreement between the two nations. Trade Minister Gan Kim Yong revealed ongoing negotiations with U.S. Commerce Secretary Howard Lutnick to secure preferential tariff treatment and maintain SingaporeS competitiveness in the American market. The stakes are high, as broader sectoral tariffs could substantially impact demand for key Singaporean products, including semiconductors, consumer electronics, and pharmaceuticals – representing roughly 40% of all exports to the U.S.
While a free trade agreement has been in place since 2004, Singapore currently faces a 10% baseline tariff on exports to the U.S. Recent increases in steel and aluminum tariffs have already pushed the effective U.S. tariff rate on Singaporean goods up to 7.8% in july, from 6.8% in April. Gan emphasized the need for a favorable arrangement, stating, ”We do look forward to having some preferential treatment versus the current top-line tariff the U.S. has imposed,” but acknowledged that the specific tariff rate – whether 15% or another figure – remains a key point of negotiation.
Gan indicated discussions are focused on potential deals within the pharmaceutical and semiconductor sectors, aiming to ensure continued access for Singaporean companies to the U.S. market. The central bank warned in July that increased tariffs could severely curtail demand for Singapore’s crucial export commodities.
