Restrained response to US tariffs provides reason for optimism: SM Lee

He says there are still things that countries can do to boost trade, cooperation with one another

- Tham Yuen-C Senior Political Correspondent

The restrained response of countries following the widespread US tariffs in April prevented an all-out trade war, providing some reason for optimism that the existing trade framework may hold, said Senior Minister Lee Hsien Loong.

“It is quite clear that they want to preserve as much of the framework as possible, so that you do not end up mutually impoverishing each other,” he said.

The world order has come a long way towards unravelling, given the US-China rivalry and the trade imbalances and tensions that have built up between countries, he noted at a dialogue at London-based think-tank Chatham House on Oct 27.

The United States has also decided it will no longer be the champion of free trade and multilateralism, which have underpinned global trade for years.

“Now we talk about security, resilience, tit for tat, and a bilateral, transactional, win-lose approach - at least in some circles,” said SM Lee, who was in Britain for a working visit from Oct 27 to 28.

“Where do we go from there? I think for many countries, the direction it is going - we have grave forebodings, and we are not sure how to make a U-turn, but we will try our best not to go in the most disastrous directions,” he added.

Reflecting on how small states can navigate the global shifts, SM Lee said there are still things that countries can do to promote trade and cooperation with one another.

His remarks come as the US and China agreed on the framework of a potential trade deal after months of escalated trade tensions.

US President Donald Trump and Chinese President Xi Jinping are due to discuss the agreement on Oct 30 in South Korea, where world leaders will gather for the Asia-Pacific Economic Cooperation Forum.

Referring to the discussions, SM Lee said these “smoke signals” are encouraging, but the deeper contradictions between the two superpowers will not disappear.