Singapore Sees Progress in US Tariff Talks, But Uncertainty May Overwhelm Hope

Most analysts believe MTI will maintain its 0% to 2% growth forecast for 2025

- Ovais Subhani

Singapore will not be racing to upgrade its economic growth forecast later this week as recent positive developments on the trade and tariff fronts are insufficient to cut through the deep uncertainty clouding the outlook.

The 90-day truce on the US-China tariff war announced on May 12 and the US-Britain trade deal have lowered anxiety levels on the health of global trade that powers Singapore's export-driven economy.

On May 16, Deputy Prime Minister Gan Kim Yong reported progress on trade talks with the US. He said while a 10 per cent baseline tariff on Singapore remains non-negotiable, there is hope that the Republic will be spared an upcoming sectoral levy on its pharmaceutical exports.

Although not yet part of the discussions, DPM Gan said Singapore intends to engage the US on semiconductor exports, which are also likely to be tariffed, and to ensure a smooth flow of US technology to its chips industry and digital economy.

On the domestic front, Singapore's manufacturing output bounced in March from a weaker level a month earlier. Non-oil domestic exports posted a double-digit spike in April.

Yet, most analysts believe Singapore's Ministry of Trade and Industry (MTI) will maintain its 0 per cent to 2 per cent gross domestic product growth forecast for 2025 when it releases the first-quarter economic survey on May 22.

Speaking to the media on May 16, DPM Gan warned that any deal on sectoral tariffs is unlikely to happen any time soon. There is also much uncertainty over the durability of the US-China deal.