Singapore companies brace for tariff challenges

[SINGAPORE] More than 80 per cent of companies in Singapore anticipate adverse effects on their business from US-imposed tariffs over the next six months, according to findings from a recent survey. In response, the Singapore Business Federation (SBF) has rolled out a new guide aimed at helping companies — particularly small and medium-sized enterprises (SMEs) — manage the growing uncertainty in the global trade environment.

The survey, conducted from April 11 to 23, polled close to 300 firms across various industries. The results paint a challenging outlook for local businesses, with many already feeling the pressure. Around half of the surveyed companies reported direct or indirect exposure to the US market, and nearly one in five indicated that over 50 per cent of their annual revenue is derived from American customers.

Short-term projections are bleak. Three in four businesses expect revenue declines, while half foresee rising operational costs. The pinch is already being felt by some — 40 per cent of respondents say they are currently experiencing the fallout from the tariffs. SMEs, often more vulnerable than larger corporations, are expected to bear the brunt of the impact.

The US tariffs, originally implemented to shield domestic industries, have triggered a complex chain of retaliatory measures and global trade tensions. As a highly trade-dependent nation, Singapore is particularly exposed to such disruptions. The country's open economy and deep integration with global supply chains leave its businesses susceptible to any shifts in international trade dynamics.

Beyond immediate cost pressures, businesses are also grappling with broader concerns including currency fluctuations, supply chain delays, and the potential for retaliatory tariffs. Seven in ten firms indicated they plan to raise prices to offset increased costs, though many will attempt to absorb some of the burden to maintain competitiveness.

Currency volatility is a prominent issue, especially for companies heavily reliant on US markets. Fluctuating exchange rates complicate financial planning and budgeting. Meanwhile, supply chain disruptions have led to delays and rising procurement costs. The looming threat of further trade retaliation by other nations has added another layer of uncertainty for business leaders.

To manage the financial strain, roughly 60 per cent of companies say they will require additional working capital. Many have also called for greater government support, including tax relief, access to funding, and clearer strategies for leveraging existing free trade agreements.

The Singapore government has taken proactive steps to address these concerns. Initiatives such as tax rebates, grants, and targeted funding schemes have been introduced to help businesses navigate the difficult landscape. Authorities have also collaborated with industry associations to provide guidance on maximising the benefits of current trade agreements.

In a move to equip businesses with practical tools, the SBF, in partnership with the Federation of Chinese Chambers of Commerce and Industry’s Future Trade and Investment Centre, has unveiled a new resource titled Navigating US Tariffs. The guide offers structured advice for firms responding to trade disruption, tailored to different stages of impact.

In the short term — up to three months — companies are encouraged to conduct risk assessments and evaluate their financial position. This involves scrutinising supply chain vulnerabilities, calculating tariff-related cost impacts, and reviewing liquidity and credit access.

From four to twelve months, the guide recommends reconfiguring supply chains and strengthening financial planning. This may include diversifying suppliers, entering new markets, or even shifting operational bases. Financially, companies are urged to manage cash flow carefully, control debt, and explore new funding avenues.

For the long haul, the guide points to digitalisation, innovation, and broader business transformation as key to building resilience. Embracing technology, enhancing digital capabilities, and adopting forward-looking business models are highlighted as critical strategies for remaining competitive in a shifting global trade landscape.