New task force on US tariffs to focus on engaging businesses and workers, sharing information: Gan Kim Yong

SINGAPORE: A new task force set up to help businesses and workers tide through the recent tariffs imposed by the United States will focus on communication and information sharing, said Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong on Tuesday (Apr 8).

For instance, it will gather information from private-sector representatives on the challenges that businesses are facing on the ground and how the government can support them.

There are also expectations that jobs might be affected in the medium to long term given the possibility of a “major restructuring” of the economy, which is why union representatives are included in the task force, said Mr Gan who is chairing the task force.

Announced by Prime Minister Lawrence Wong during a ministerial statement in parliament on Tuesday, the task force will aim to help businesses and workers address immediate uncertainties, strengthen resilience and adapt to a new economic landscape.

It will comprise Singapore’s economic agencies, as well as the Singapore Business Federation, Singapore National Employers Federation and the National Trades Union Congress.

Mr Gan said the task force is still working out the details of its composition and key tasks ahead, adding that the government’s main guiding principle is to be “as transparent as possible”.

“When we know something important, we’ll share with the population, with the businesses, with the workers, with the unions and with members (of parliament),” he said.

“When we don’t know yet, we’ll tell you honestly we do not have the information yet”.

He added that it is still early days and the government will need time to get a better understanding and assessment of the tariffs’ impact on the Singapore economy.

At the same time, the government is reaching out to Singapore’s trading partners to share information and its assessment of the situation, as well as find different ways of working together, said Mr Gan.

CONCERNS ABOUT IMPACT OF TARIFFS

Several members of parliament raised concerns about how the latest US tariffs will impact local businesses and consumers, while seeking more details on the task force.

Nominated MP Mark Lee said Singapore businesses will likely have to contend with a drop in global demand, as well as margin erosion with clients already requesting supply chain partners to absorb part of the tariffs-induced cost shock.

On top of that, Singapore firms that have adopted a “China Plus One strategy” – which involves companies diversifying into other countries, such as Vietnam and Cambodia, to avoid US tariffs on goods from China – are now under renewed pressure to diversify even further. This will be a “costly and complex” move for local firms, he said.

With that, Mr Lee hopes the task force will look at near-term support measures to help firms in cash flow, relocating or re-shoring their supply chains, as well as take a longer-term view to seize new opportunities arising from shifts in global supply chains.

In response, Mr Wong said the government has gathered similar feedback from businesses and is concerned about how the disruptions to firms and their operations might lead to a spillover impact on overall economic growth. 

“That is why we think their concerns have to be dealt with quickly so DPM Gan’s task force will continue to engage businesses to better understand the full extent of the impact because this situation is still unfolding, and eventually work out what additional measures we need,” said Mr Wong.

Noting that US tariffs could be imposed on the semiconductor industry, Mr Saktiandi Supaat (PAP-Bishan-Toa Payoh) asked about the impact such tariffs would have on jobs and growth.

Mr Gan said the potential tariffs on the semiconductor industry are “something … of great concern” given how Singapore’s semiconductor exports to the US make up about 8.9 per cent of Singapore’s total goods exports to the US.

This is equivalent to 0.8 per cent of Singapore’s total goods exports to the world last year – an amount that is “not insignificant”, said the minister.

The government has been engaging the semiconductor industry and will continue doing so, said Mr Gan.

MPs, such as Mr Liang Eng Hwa (PAP-Bukit Panjang), also raised questions about trade negotiations with the US.

Mr Liang wanted to know if the government continues to have access to key US officials for negotiations on tariffs, and whether the latest move by the US might affect other bilateral initiatives.

In his reply, Mr Wong said Singapore will “actively engage” members of the US administration to better understand their concerns about the trade relationship between both countries, “address any misperceptions” and discuss the best way forward.

“Of course, if the US decides that the baseline rate is universal across all countries, then it’s a different consideration altogether,” he added.

“It’s not bilateral; it’s their view of the world and they have decided that every country should at least have a 10 per cent tariff, but we are continuing to have these conversations with the US administration, and also with other countries.”

The tariffs, announced by US President Donald Trump on Apr 2, impose a universal 10 per cent tariff on all imports into the country, with higher rates for countries deemed to have treated the US "unfairly".

Singapore, which currently imposes zero tariffs on US imports, is subject to the baseline 10 per cent rate.

On other aspects of Singapore’s relationship with the US, Mr Wong noted that both countries have built up a “close relationship” over many decades in areas such as security and defence.

These will be maintained, alongside discussions for new cooperation in areas like new technologies and energy. 

“So, these areas of cooperation remain, and we certainly want to continue advancing them as well,” said Mr Wong.