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