IT IS “too early” to say if US investments into Singapore would be affected by tariffs meted out by the Trump administration, the chairman of Singapore’s Economic Development Board (EDB) said on Thursday (Feb 6).
“When companies make investments, particularly in manufacturing… these investments are made with a medium-to-longer-term perspective,” EDB chairman Png Cheong Boon said in response to questions at a media briefing. “They are not made based on year-to-year fluctuations.”
EDB managing director Jacqueline Poh noted though that if there are pervasive tariff regimes and protectionist policies – as well as retaliatory rules – by countries around the world, this would have an impact on global trade and growth, which would in turn affect general investment and exports.
Asked about EDB’s outlook for 2025, Poh said: “It will be volatile, and we are seeing many headwinds to global growth, and some of them will affect investment decisions.”
However, she added that tariffs alone are not the only driver for investment decisions.
Many companies invest for the long term, and there are many reasons why they want to expand out of their countries, she said.
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This may include growth opportunities abroad, stiff domestic competition, as well as desire for stability and safety from natural disasters.
“Companies ask us, ‘Is Singapore earthquake-prone?’ when deciding to set up a semiconductor plant. ‘How resilient are we to climate change?’ These are the questions that we’re getting now,” she said.
Png added that companies would need to build a new plant if projected long-term demand calls for additional capacity for a particular product.
“Where they want to build a plant depends on whether they have confidence that the location can give them the stability, the certainty and the competitiveness that the plant can continue to enjoy over a long period of time,” he added.
Asked if there is increased interest from Chinese companies setting up headquarters in Singapore, Png said Singapore is considered a very attractive location due to various reasons, including its connectivity, manufacturing base to serve the global market, and its position as a regional hub for Asia and beyond.
“In this context, it’s not surprising that we see Chinese companies who want to grow outside of China, especially when they are faced with a slowing domestic market,” he said.
“The immediate facility outside of China is actually South-east Asia, and Singapore becomes a more logical place for some of them, not all of them.”
He added that EDB’s concern is that companies that choose Singapore follow the country’s laws and rules.
