By Jun Yuan Yong
SINGAPORE (Reuters) -Singapore’s economic growth forecast may need to be adjusted further, its trade minister said on Friday, as uncertainty remains despite a recent breakthrough in U.S.-China tariff negotiations.
Trade Minister Gan Kim Yong, also deputy prime minister, said the trade-reliant economy is beginning to slow down and while U.S.-China talks are encouraging “we need to exercise caution, because the outlook remains very uncertain.”
Singapore in April downgraded its gross domestic product forecast for the year to a range of 0% to 2% from 1% to 3%.
Despite having a free trade agreement with the United States, the wealthy financial hub was subject to a 10% baseline tariff, though far short of the stiff levies on Southeast Asian neighbours which are among the world’s hardest hit.
The United States has imposed tariffs of 32% on Indonesia, 36% on Thailand, 46% on Vietnam, 49% on Cambodia and 24% on Malaysia.
As one of the world’s most open economies, Singapore is often seen as a bellwether for global growth as its international trade dwarfs its domestic economy.
That leaves the city-state exposed to global uncertainties and its government has warned the 10% tariff and the global trade war could lead to a recession and job losses.
Gan told a press conference the United States was not going to budge on the 10% levy, but it was trying to negotiate for concessions on pharmaceutical tariffs that U.S. President Donald Trump has threatened but not yet announced.
“Both Singapore and the U.S. can sit down and discuss some form of a concession for Singapore to have a beneficial or preferential tariff, even to the extent of zero tariff, for pharmaceutical exports to the U.S. That will require some efforts on the Singapore side to ensure that the supply chain for pharmaceuticals is secure,” said Gan.
He did not elaborate on what he meant by a secure supply chain.
Gan previously said that pharmaceuticals makes up more than 10% of Singapore’s total exports to the U.S.
(Reporting by Jun Yuan Yong; Editing by Martin Petty)
