Singapore’s Exports Slip Amidst Global Trade Uncertainty
Singapore’s non-oil domestic exports experienced a 4.6% decline in July compared to the same period last year, as shipments to the United States plummeted by over 40%. This downturn is attributed to the city-state’s heavy reliance on international trade, making it vulnerable to global economic fluctuations, particularly those induced by tariffs imposed by the US.
The decline in exports to the US, Singapore’s largest market, was largely driven by a 93.5% drop in pharmaceutical shipments, according to Enterprise Singapore. Additionally, exports of specialized machinery and food preparations decreased by 45.8% and 48.8%, respectively.
Non-oil domestic shipments to China and Indonesia also declined in July, while exports to the EU, Taiwan, South Korea, and Hong Kong experienced growth. Despite this mixed performance, Singapore’s trade ministry has raised its 2025 economic growth forecast, with the gross domestic product (GDP) growth forecast now standing at 1.5-2.5%.
However, Prime Minister Lawrence Wong expressed caution, stating that he takes “little comfort” from the 10% baseline tariff rate imposed by the US. Wong emphasized that the uncertainty surrounding US tariffs poses a significant challenge for small, open economies like Singapore.
“We do not know if, or when, the US might raise the baseline or set higher tariffs on specific industries like pharmaceuticals and semiconductors,” Wong said in a National Day speech. “What we do know is that there will be more trade barriers in the world. That means small and open economies like us will feel the squeeze.”
The US tariffs, particularly those targeting chips and pharmaceutical imports, have raised concerns among Singaporean officials. The city-state’s export-driven economy is heavily reliant on international trade, and the uncertainty surrounding US tariffs poses a significant challenge for its economic growth.
In light of these developments, Singapore’s economic growth forecast for 2025 remains clouded by global uncertainty. As a small, open economy, Singapore is susceptible to the impacts of global trade fluctuations, making it essential for policymakers to remain vigilant and responsive to emerging challenges.
In summary, Singapore’s non-oil domestic exports have declined amidst global trade uncertainty, with the city-state’s reliance on international trade making it vulnerable to economic fluctuations. While the trade ministry has raised its economic growth forecast, Prime Minister Wong has expressed caution, highlighting the need for policymakers to remain vigilant in the face of emerging challenges.
