[SINGAPORE] The United States’ sweeping “Liberation Day” tariffs mark “a seismic change in the global order” – and in the ensuing slowdown, heavily trade-reliant Singapore will take a bigger hit than others, Prime Minister Lawrence Wong warned on Friday (Apr 4).
In a five-minute YouTube video, he explained the ramifications of the US government’s Wednesday announcement of sweeping global tariffs, set to kick in on Saturday.
“I’ve said before that the world is changing – in ways that will disadvantage small open economies like Singapore,” said PM Wong.
The Liberation Day announcement by US President Donald Trump “leaves no room for doubt” about this, he added.
“It marks a seismic change in the global order,” PM Wong said. “The era of rules-based globalisation and free trade is over. We are entering a new phase – one that is more arbitrary, protectionist and dangerous.”
The US had championed free trade for decades, but is now abandoning the system it created, he noted. “Its new approach of reciprocal tariffs, country by country, is a complete rejection of the WTO (World Trade Organization) framework.”
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Granted, Singapore faces the lowest base tier of a 10 per cent tariff. Yet, while the direct impact may be limited for now, there are “wider and more profound consequences”, the prime minister warned.
If other countries similarly abandon the WTO’s multilateral approach, “it will spell trouble for all nations, especially small ones like Singapore”.
While the Republic has chosen not to retaliate, other countries may not show the same restraint, he said, warning of a likely “strong global response to America’s tariffs”.
Trade war
“The likelihood of a full-blown global trade war is growing,” he said.
Higher tariffs and uncertainty will weigh on the global economy, weakening trade, investments and growth worldwide, he added. “Singapore will take a bigger hit than others, because of our heavy reliance on trade.”
He noted that the world experienced something similar in the 1930s – when “trade wars escalated into armed conflict and eventually, the Second World War”.
“No one can say how the current situation will unfold in the coming months or years,” he said. “But we must be clear-eyed about the dangers that are building up in the world.”
He assured Singaporeans that the Republic will remain vigilant, build up capabilities and strengthen partnerships with like-minded nations.
“We are more ready than many other countries, with our reserves, our cohesion and our resolve.”
Concluding, the prime minister urged Singaporeans to “brace” for more shocks to come, and to be “mentally prepared” so that the nation is not caught off guard.
“The road ahead will be harder. But if we stay resolute and united, Singapore will continue to hold its own in this troubled world.”
