<\/p>\nBudget 2026<\/p>\n
<\/a>, may be helpful if needed. <\/p>\n
\u201cThe Government\u2019s large fiscal surplus position leaves ample dry powder to draw upon in the event of any negative impact from Trump\u2019s tariff threats or in the event of any unexpected shock or downturn,\u201d he said. <\/p>\n
However, what is likely to hurt every economy, including Singapore\u2019s, will be the uncertainty around how the US would resurrect the tariff regime back to where it was before the court decided that the International Emergency Economic Powers Act (IEEPA) does not grant Mr Trump the authority to impose tariffs without congressional approval. <\/p>\n
While not all tariffs fall under IEEPA, analysts believe most of them do \u2013 including the 10 per cent baseline tariff Singapore was subject to. <\/p>\n
In an immediate response, the White House issued a new executive order using Section 122 of the Trade Act to impose the global 10 per cent tariffs from Feb 24. Mr Trump on Feb 21 announced in a Truth Social post that the tariff rate would be raised to 15 per cent. <\/p>\n
The statute, which has never been used before, allows for temporary tariffs for only 150 days and requires Congress to extend it thereafter. It is unclear if the White House can extend Section 122 for another 150 days on its own with a new executive order. <\/p>\n
The US trade and commerce officials have indicated that the lost IEEPA tariffs can be replaced by using Section 232 of the Trade Expansion Act, which concerns national security threats, and Section 301 of the Trade Act for unfair trade practices \u2013 both already cover some products imported by the US. <\/p>\n
However, analysts believe that after the Supreme Court\u2019s decision \u2013 which categorically puts tariffs as the preserve of the legislative branch \u2013 the Trump administration will struggle to justify more durable legal authority to reimpose the duties. <\/p>\n
Dr Deborah Elms, head of trade policy at Singapore-based think-tank Hinrich Foundation, believes that as Mr Trump remains committed to the invocation of some variation of national emergency to entrench a wide-ranging tariff wall, the trade chaos will continue. <\/p>\n
\u201cThe global trade community had been hoping for greater clarity in the wake of a Supreme Court ruling. Unfortunately, it isn\u2019t getting any,\u201d she said. <\/p>\n
Dr Elms noted that while the court decision provides some certainty about what constitutes a national emergency, it does not remove much of the uncertainty that is a hallmark of Mr Trump\u2019s trade policy and tariff threats. <\/p>\n
\u201cThe President\u2019s doubling down on his trade policy may, in fact, result in new risks for American businesses and US trade partners,\u201d she said. <\/p>\n
Mr Brian Levitt, chief global market strategist at US asset management firm Invesco, said overall US tariff levels are unlikely to decline substantially \u2013 meaning those previously enacted under the IEEPA could simply be reimposed under different legal frameworks. <\/p>\n
\u201cGiven multiple avenues (that) can be pursued to keep tariffs in place, US tariffs appear here to stay even though their legal basis may change,\u201d he said. <\/p>\n
However, Mr Levitt also believes that the resilience shown by the world\u2019s leading trading economies in 2025 means that new tariffs would not shock anyone. <\/p>\n
\u201cFortunately, global economies and financial markets have already proven they can withstand multi-decade high US tariff rates,\u201d he said. <\/p>\n
Mr Ahya also believes it is more likely that businesses will hold the view that the peak level of uncertainty on tariffs and trade tensions has passed. <\/p>\n
He said Morgan Stanley\u2019s US public policy team expects Mr Trump to pursue \u201ca lighter-touch tariff policy under the surface\u201d, with \u201cmore exceptions, carve-outs, delays\u201d over the medium term. <\/p>\n
\u201cIn other words, while there may be more actions to potentially lift tariffs from here, it does appear that tariffs on Asia have likely peaked,\u201d he said. <\/p>\n<\/div>\n
\n
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