Singapore may lose slight competitive edge under new 15% US tariffs, but analysts say it remains resilient

Singapore was previously subject to the baseline 10 per cent levy, while some other countries faced steeper reciprocal tariffs.

Despite the increase, Singapore’s effective tariff burden remains the lowest in the region by a wide margin, according to Maybank Securities economist Brian Lee.

He said Singapore will likely see a 1.8 percentage point increase in US tariffs to about 6.9 per cent on an effective basis.

“This effective tariff rate remains the lowest in ASEAN by a wide margin,” he said, noting that exemptions from last year’s reciprocal tariffs are still in place.

“Singapore remains the ASEAN country with the largest share of exempted goods (such as semiconductors, electronics and pharmaceuticals). Exempted goods comprise more than 60 per cent of Singapore’s US-bound shipments,” he added.

SINGAPORE’S STRENGTHS

Singapore’s competitive advantage lies “beyond the rudimentary calculation of tariff rate differentials”, added Mr Edward Lee, chief economist at Standard Chartered.

“Competitiveness will encompass many other aspects, such as institutional stability, policy credibility and stability, robust financial capability, connectivity, productivity, expertise,” he said.

The Economic Strategy Review aims to increase Singapore’s comparative advantage further so that the country is more anchored in new and growth sectors, he added.

“This will help to improve the resilience of our economy,” he said.