The island nation of Singapore, which has grown into a flourishing economy from a small trading post over the past 60 years, is feeling the heat of the global tariff war waged by US President Donald Trump. As an open economy impacted by international developments, Singapore has downgraded its 2025 GDP growth forecast to a range of 0 per cent to 2 per cent. This was announced by the Singapore Ministry of Trade and Industry (MTI) today.
A CNA report on the Trump tariff impact said that the Monetary Authority of Singapore (MAS) had also “loosened monetary policy for the second time in a row”, as a counter-measure.
The April 14 announcement of downgrading by MTI comes exactly two months after a February 14 media release stating that the ministry was maintaining the Singapore “GDP growth forecast for 2025 at 1.0 to 3.0 per cent”. That media release had said that the Singapore economy had expanded by 4.4 per cent in 2024.
In its media release dated April 14, MTI said that the Singapore GDP had grown by 3.8 per cent in the first quarter (Q1) of 2025, “on a year-on-year basis”. This was “slower than the 5.0 per cent growth in the previous quarter”, said MTI.
The ministry explained: “On a quarter-on-quarter seasonally-adjusted basis, the economy contracted by 0.8 per cent, a reversal from the 0.5 per cent expansion in the fourth quarter of 2024. This was due to sequential declines in manufacturing and some outward-oriented services sectors such as finance & insurance in tandem with slowing external demand.”
That the global economy had been hit hard by the Trump tariff war was outlined in a blog published by the World Economic Forum (WEF) on April 8. A world map accompanying the WEF blog showed the US-imposed tariffs on countries around the globe.
The blog said: “The additional tariffs — which Trump claimed are reciprocal and aimed at countering unfair trade practices — stunned governments and business leaders worldwide, and resulted in significant volatility in global financial markets.”
The South-East Asia region faced reciprocal tariffs ranging from 18 per cent (the Philippines), 24 per cent (Malaysia), and 37 per cent (Thailand) to a high 49 per cent (Cambodia), according to the WEF blog map.
However, two days after this WEF blog was published, the US decided to suspend the higher tariffs for 90 days and replace them with a flat 10 per cent tariff.
Singapore, too, has been hit by this 10 per cent reciprocal tariff, as per a media release by Enterprise SG. It said: “The US’ 10 per cent tariffs on imports from Singapore came into effect on 5 April 2025, the same as all 124 other countries subject to the 10 per cent baseline tariffs. On 10 April 2025, the US announced that it would suspend the higher, ‘reciprocal’ tariffs on 90 countries for 90 days and replace these with 10 per cent tariffs during this period.”
Enterprise SG clarified that even those goods that qualify for the US-Singapore Free Trade Agreement (USSFTA) “are generally not exempted from the US’ 10 per cent tariffs on imports from Singapore”.
With this global scenario as the backdrop, the Singapore MTI media release said today: “Although there has been a temporary 90-day pause in the implementation of the higher reciprocal tariffs except for China, the tariff war between the US and China has intensified, with an escalating cycle of tit-for-tat tariffs being imposed by both sides. Product-specific tariffs implemented by the US earlier also remain in place and more could be introduced in the coming months.”
MTI said that the “sweeping tariffs introduced by the US, and the ongoing trade war between the US and China” would “significantly” impact global trade and global economic growth, including the neighbourhood of Singapore.
“…The growth outlook of economies in our region will be negatively affected by a fall in external demand due in part to the tariffs’ wider impact on global trade and growth. Business and consumer sentiments will also be dampened, thereby crimping domestic consumption and investments in many economies,” it said.
