Trump hits Singapore with new 12.5% tariff, affecting one-third of exports to US

SINGAPORE – About one-third of Singapore’s domestic exports to the US are now subject to a new 12.5 per cent levy aimed at rebuilding US President Donald Trump’s tariff regime after it was undermined by a court decision earlier in 2026.

The Republic’s Ministry of Trade and Industry (MTI) said the new tariff took effect at 12.01am Eastern time on July 24.

A US Federal Register notice published on July 23 listed the Republic among dozens of other economies that now face duties of between 10 per cent and 12.5 per cent following a probe by the Office of the US Trade Representative (USTR) into forced labour concerns.

Announcing the new levy, US Trade Representative Jamieson Greer said: “The United States has had a forced labour import ban for nearly a century, and rigorously enforces it; it’s well past time for our trading partners to do the same.”

The USTR investigation – which started in March and concluded in July – placed Singapore among 45 economies that will face 12.5 per cent duties, claiming they have failed to both adopt and effectively enforce prohibitions on trade in goods produced with forced labour.

Goods from some 10 trading partners deemed to have adopted forced-labour restrictions will be subject to 10 per cent tariffs, including Mexico, Britain, Canada and India.

Goods from Japan, Switzerland and South Korea will also be taxed at 12.5 per cent, but in a way that complies with the trade agreements they reached with the US.

Singapore has rejected suggestions that it engages in unfair trade practices, including the use of forced labour in supply chains, and has told the US that it does not condone such practices.

On July 24, MTI said it will continue to engage the USTR to explore options on this matter. Further details on how the tariff will be implemented will also be announced in due course, it added.

“Singapore does not condone the use of forced labour and has a comprehensive enforcement framework and good track record against such illegal practices within our borders,” MTI said in a statement.

The ministry noted that forced labour in complex and multi-tiered international supply chains is a transnational issue that requires international cooperation and is most effectively addressed at source.

“Singapore is a major trading hub. As such, any trade restriction, including a prohibition on goods produced with forced labour, would need to be carefully considered, which we will continue to do in close consultation with the Singapore Economic Resilience Taskforce and the business community.”

Foreign Minister Vivian Balakrishnan also told reporters on July 23, after wrapping up a week of meetings at the ASEAN Foreign Ministers’ Meeting in Manila, that he had raised the matter during a bilateral meeting with US Secretary of State Marco Rubio.

MTI said on July 24 that products subject to Section 232 tariffs – such as primary metals (steel, aluminium and copper), downstream derivative products, and specific strategic goods such as automobiles, trucks, and wood products – are exempted from the new tariff measure.

Some exports will also remain exempt, such as energy and energy products, pharmaceuticals and pharmaceutical ingredients, certain electronics, certain aerospace products, semiconductors, and metals used in currency and bullion.

According to a presidential memorandum issued by the White House, goods already facing Trump’s sector-specific tariffs and fertilisers will be exempt too, alongside goods covered by the US-Mexico-Canada free trade pact.

The new tariff is part of a series of measures initiated to impose new and harsher tariffs after the US Supreme Court in February struck down the legal basis for Trump’s signature reciprocal tariffs, imposed in 2025.

It replaces a 10 per cent global levy under Section 122 that was imposed immediately after the court’s decision and expired earlier this week.

Singapore, along with 15 other economies, is also subject to USTR investigations under Section 301 into acts, policies and practices relating to structural excess capacity and production in manufacturing sectors.

It is unclear when the findings of that probe will be released, or whether any future duties from that investigation would be stacked on top of those proposed under the forced labour investigation.

Last week, Greer said in a Bloomberg Television interview that the excess capacity investigation is taking longer than the one into forced labour because the USTR is trying to make sure that the measure lives up to the letter of the law.

Experts believe the Trump administration is using Section 301 of the Trade Act of 1974 as the legal basis for imposing the new tariff on trade in goods produced with forced labour because it has no statutory expiration date or maximum percentage cap.

Historically, measures imposed under this law have also proven far more resilient against judicial overturns.

However, using the statute as a dragnet to apply blanket global or multilateral tariffs to dozens of countries stretches the law beyond Congress’ intent. As a result, experts anticipate immediate lawsuits once the tariff takes effect.

Lennon Tan, president of the Singapore Manufacturing Federation, said on July 24 that the characterisation underpinning this tariff does not reflect the standards its members uphold.

However, the impact on Singapore manufacturing companies will be real, he noted.

“Our members face uncertainty over whether further duties may be layered on,” he said, referring to the ongoing excess-capacity investigation.

“We are surveying affected exporters, particularly those with significant US exposure, to quantify the impact and channel their concerns to the Government,” he said.

Tan added: “Manufacturers should continue diversifying markets, strengthening supply chain resilience and leveraging Singapore’s network of free trade agreements and the region’s growth to reduce their dependence on a single market.”