Business confidence rising as cloud of uncertainty from US tariffs clears: DBS

When US President Donald Trump announced tariffs on virtually every country in the world in April on “Liberation Day”, it cast a cloud of uncertainty over businesses.

- Annabelle Liang Correspondent

“The conversations that we had with companies were - this is causing a lot of disruption. We do not know where tariffs will land,” DBS group executive and group head of institutional banking Han Kwee Juan said in an interview with The Straits Times.

But much of the impact from tariffs and lower interest rates has already been priced in, while recent improvements in the geopolitical climate are giving companies clearer visibility to plan and execute their next moves.

“Companies want to grow and invest, they just need predictability. Now, they have greater clarity on the direction of travel for rates and tariffs,” Mr Han said.

One of the key factors driving renewed investment interest is lower US interest rates. The US Federal Reserve has made two rate cuts so far in 2025, with the most recent cut announced on Oct 29, when it lowered its key lending rate by a quarter of a percentage point to a range of 3.75 per cent to 4 per cent.

This has contributed to an inflow of capital into the Republic, Mr Han said. “With the amount of money coming in and the liquidity that we see, rates will continue to be at this level or even slightly lower as we head into 2026.