Trump tariffs shake up S'pore's manufacturing sector

New duties on pharmaceuticals and chips may follow, which will impact firms here

- Grace Leong

In the weeks after crippling tariffs were unleashed by US President Donald Trump, American customers of Singapore-based Watson EP Industries asked the contract manufacturer to shift its production of consumer electronics from China and Vietnam to its Singapore factory.

Singapore is among nations subject to a baseline 10 per cent tariff rate, which came into effect on April 5. In addition, so-called reciprocal tariffs of between 11 per cent and 50 per cent were imposed on imports from more than 90 nations that run trade surpluses with the US.

Asian nations found themselves facing some of the highest tariffs, with Cambodia at 49 per cent and Vietnam at 46 per cent.

"Following this, our US customers asked us to shift production of consumer electronics from China and Vietnam to Singapore, and it was a good problem," Watson executive director Joyce Seow told The Straits Times.

Then Mr Trump on April 9 announced a 90-day pause on the tariffs while his officials hash out "tailor-made" deals, country by country.

"We were asked to expand in Singapore, but we also need the assurance on how long production is required here before we make the investment," Ms Seow said.

"Since the tariff crisis erupted in early April, we have been doing a lot of scenario planning, on top of our daily operations.

"No concrete action can be taken on new production capacity because of the unpredictability of US trade policy."

GD Precision chief technology officer Gerry Ong has seen a spike in inquiries from US semiconductor makers, including Fortune 500 companies seeking to "derisk" supply chains by shifting production for the US market away from China to Singapore.

"They want to collaborate with us to manufacture semiconductor modules, or source semiconductor components from Singapore and Malaysia instead," said Mr Ong, whose firm makes semiconductor, aviation and medical components.