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[SINGAPORE] With no safe haven from US President Donald Trump’s “Liberation Day” tariffs, Singapore exporters may not necessarily be hit worse than others. Still, companies told The Business Times that they are doubling down on diversifying suppliers and customers.

On Wednesday (Apr 2), Trump announced a universal baseline 10 per cent tariff on imports and higher levies on 60 “worst offenders”.

“No single country is immune,” noted Camellia Chan, chief executive officer of storage device maker Flexxon.

The blanket tariffs put Singapore in a relatively better position, said Spaze Ventures managing director Alex Ng, as the 10 per cent rate it was hit with is low compared to the 17 to 49 per cent tariffs slapped on other South-east Asian nations and China.

Still, the tariffs mark a “significant shift” from duty-free access enjoyed thus far under the US-Singapore Free Trade Agreement, noted Singapore Furniture Industries Council (SFIC) president Joshua Koh. He expects the levies to hurt furniture brands exporting from Singapore, as well as Singapore-based companies engaged in interior fit-outs for US commercial and hospitality sectors.

Tangled web

The United States is Singapore’s fourth-biggest export market, with exports trending upwards in the last decade to hit S$57.6 billion in 2024.

But for Singapore companies that sell to the US, the bigger worry may be if production takes place overseas.

For many Singaporean furniture companies that manufacture in China, Vietnam, Malaysia, Indonesia, and Thailand – which face even higher US tariffs – it may be time to reconsider their production locations, Koh said. They could also explore “tariff engineering”, or designing products to minimise duties, he added.

Yet even as Singapore may look attractive by comparison, higher levies on trading partners will have adverse knock-on effects. Noted Koh: “Many Singapore firms are part of integrated regional supply chains – supplying components, sub-assemblies or design services for final products exported to the US from other countries.”

Cumulative tariffs across the supply chain could cause their goods to lose cost competitiveness, he added. US clients could also renegotiate contracts or shift sourcing elsewhere.

SGTech chair Nicholas Lee highlighted “broader macroeconomic repercussions” such as higher inflation and slower global growth, which will hurt consumer sentiment and business spending. Local tech companies could see less demand as companies trim IT budgets and cut spending on digital transformation, said Lee. This is as businesses turn more cautious, delaying investments or re-allocating budgets to cushion against higher costs.

Chee Teck Lee, founder and CEO of optical product maker Moveon Technologies, expects a significant indirect impact of the tariffs on revenue. This is due to adverse business sentiments, customers adopting a “wait-and-see” stance and lower consumption if costs are passed to consumers.

Some 30 per cent of Moveon’s revenue comes ultimately from US-based customers – yet it mainly exports to China, Vietnam, Thailand and the Philippines, where these customers’ contract manufacturers are based.

SFIC’s Koh highlighted that even less-affected companies “view (the tariff) developments with caution”. These include companies that focus on non-US markets, exporters of “non-volume-driven” products and those with low-volume, high-margin exports which can absorb cost hikes.

“The 10 per cent Singapore tariff, though moderate, breaks historical precedent and highlights the importance of future-proofing supply chains and reducing market dependence,” he explained.

Wait and see

For now, businesses are avoiding any “knee-jerk reactions”.

Moveon’s Chee plans to wait three to four months “to see how the implementation pans out”. “There will be opportunities arising from our lower tariffs compared to our Asian counterparts,” he said. “Potentially, we will explore with customers to move some of their businesses out from China or Vietnam to us.”

The company could explore Europe, Japan and South Korea; develop higher value-add products that are “indispensable” to US customers; or seek clients in industries less prone to fluctuation, including medical and defence.

Singapore furniture makers could redesign products for “niche and premium market segments” less sensitive to price, or strengthen collaboration in Asean, suggested SFIC’s Koh.

Furniture shop Castlery is “closely monitoring” and “actively assessing” tariff impacts, and will adjust business projections accordingly. “The US is currently our largest market, and our furniture is primarily manufactured in Asia,” said a spokesperson. But while the US remains important, Castlery is exploring other regions “to diversify (its) customer base and reduce dependency on any single market”.

Skincare company Allies of Skin CEO Nicolas Travis is also weighing the impact of tariffs, and will try not to pass costs on to customers. The company does not export from Singapore to the US, but has been expanding into America. “But with the prices of raw materials and packaging going up, we may be forced to increase our retail prices by a few per cent to help with the margin hit,” he noted. The company is also looking for other manufacturers to ensure “the most competitive pricing” and allow it to maintain retail prices.

Caution among chipmakers

The sentiment is similar in the semiconductor industry, which has been spared sector-specific tariffs for now.

Yet, uncertainty over a previously threatened 25 per cent import duty is unnerving the market, tanking global semiconductor stocks for the second straight day.

“The industry recognises that any tariff on such a critical component could have far-reaching implications, not just for chipmakers but also for the broader technology and electronics supply chain,” said Ang Wee Seng, executive director of the Singapore Semiconductor Industry Association.

He described the industry mood as one of “cautious watchfulness”, with Singapore-based firms watching policy responses while reviewing their exposure. “While few finished semiconductors are directly exported into the US, any tariff on semiconductor products – especially if applied across integrated global value chains – could have knock-on effects, especially for companies supplying modules, systems, or final goods incorporating chips,” he added.

Companies could diversify supply chains or shift production, but these are complex and time-consuming processes, he said. “For most companies, this is not something that happens overnight. It can take several years to meaningfully rebalance global operations, and even then, the geopolitical and trade environment must remain stable enough to justify such moves.”

Preparing since yesterday

Even ahead of “Liberation Day”, some companies have been diversifying.

Spaze Ventures has been seeking non-US services and partners since the start of 2025, to mitigate potential risks.

Over the last three years, Flexxon shifted “a greater portion” of its activities home to Singapore or into the US, said Chan. The company’s cybersecurity arm X-PHY, set up in California in 2021, now oversees “a significant portion” of its US-facing activities.

Flexxon also exports from other parts of Asia – including Malaysia, Taiwan and mainland China – with this “decentralised structure” ensuring agility. This strategy is not about “escaping” tariffs, which “isn’t realistic”, Chan said. Rather, it helps to “distribute risk” and avoid the prospect of “total or large-scale disruption”. She added: “We are focused on maximising our output while reducing concentrated exposure.”