[SINGAPORE] On April 2, US President Donald Trump issued sweeping tariffs in an effort to replace free trade with "fair" trade, framing it as a declaration of economic independence.
In his most ambitious economic program, which he claims will make America wealthy again, he declared a 10% tariff on all commodities entering the US from anyplace in the globe, including Singapore. He also levied significant "reciprocal" tariffs on at least 60 trading partners, alleging that they imposed unduly high charges on American imports.
The move represents a sharp departure from decades of US trade policy, which has largely championed globalization and multilateral agreements. Analysts note that the decision risks alienating long-standing allies and undermining institutions like the World Trade Organization (WTO), which has historically mediated trade disputes. The Biden administration had previously sought to re-engage with international trade frameworks, but Trump’s return to protectionism signals a dramatic reversal.
The Asian economies bore the brunt of the burden, with Cambodia receiving the highest percentage of 49%. Mr Trump increased taxes on China by 34% on top of the 20% he had already imposed, citing insufficient action to prevent the trafficking of the deadly drug fentanyl. Vietnam was tariffed at 46%, Thailand at 36%, Indonesia and Taiwan at 32% apiece, Malaysia at 24%, and the Philippines at 17%.
China, the US’s largest trading partner, swiftly condemned the measures, with its Commerce Ministry warning of “resolute and necessary countermeasures” to protect its industries. Observers suggest Beijing may target key US agricultural exports, such as soybeans and pork, in retaliation—a tactic used during previous trade spats. The escalation could further strain relations between the world’s two largest economies, already fraught with tensions over technology restrictions and military posturing in the Indo-Pacific.
Among the few Asian nations hit with under 30 per cent were allies Japan at 24 per cent and South Korea at 25 per cent. India, which Mr Trump named as imposing some of the steepest duties on US-made goods, faced a 26 per cent tariff.
Canada and Mexico are excluded from the reciprocal tariff regime, while the European Union faces a 20 per cent tariff and Australia 10 per cent.
The exemptions for Canada and Mexico highlight the enduring importance of the US-Mexico-Canada Agreement (USMCA), which Trump renegotiated during his first term. However, European leaders have expressed dismay over the new tariffs, with German Chancellor Olaf Scholz calling them “a punitive measure that harms transatlantic cooperation.” The EU has already begun preparing a list of US goods to target in response, raising fears of a broader trade conflict between Western allies.
Posters displaying information on reciprocal tariffs in the White House's James S. Brady Press Briefing Room in Washington, DC, on Wednesday, April 2, 2025. US President Donald Trump is putting tariffs on US trading partners around the world, his most serious assault yet on a global economic system he has long criticized as unfair.
Mr Trump also placed steep "reciprocal" tariffs on at least 60 trading partners, accusing them of levying unduly high charges on American goods.
Ms Wendy Cutler, vice-president of the Asia Society Policy Institute and former acting deputy US trade representative, said: "Hitting Singapore, a close ally and FTA (free trade agreement) partner with an open economy, comes as a surprise."
The inclusion of Singapore has raised eyebrows among trade experts, given the city-state’s reputation as one of the world’s most open and business-friendly economies. Some speculate that the move may be intended to pressure smaller nations into bilateral concessions, rather than reflecting genuine trade imbalances. Singapore’s Ministry of Trade and Industry has stated it is “reviewing the implications” and will “engage with US counterparts to seek clarity.”
Under the US-Singapore Free Trade Agreement, which has been in place since 2004, Singapore levies zero tariffs to US imports as long as they meet the FTA's origin standards.
The exception is Singapore's 9% goods and services tax, which applies to both imported and domestic items. Additionally, certain items, such as alcohol and tobacco, are subject to excise taxes. Ms Cutler stated that Asia appeared to have been on the receiving end.
"Even US FTA partners in the region were recipients of new tariffs, with South Korea's rate of 25% unusually high given that over 99 percent of US exports to Korea enter duty-free," she said, referring to the US-Korea Free Trade Agreement, which went into effect in 2012.
"Our trading partners will not view these rates as 'kind' or justified, and many will be under domestic pressure to respond with their own measures," she said.
Mr Trump claims that reciprocal tariffs will close what he calls a "unfair" gap between US duties on imported goods and what other countries charge on American products.
His strategy is the most substantial rethinking of the international order since World War II, which the United States helped establish. It is possible that America's trading partners will counter with their own tariffs, raising the prospect of a devastating global trade war.
"April 2, 2025, will forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed, and the day that we began to make America wealthy again," Mr Trump declared as he announced the tariffs at an event attended by his Cabinet, prominent members of Congress, and Make America Great Again supporters.
“Foreign nations will finally be asked to pay for the privilege of access to our market, the biggest market in the world,” he added.
“Because we are being very kind... we will charge them approximately half of what they have been charging us, so the tariffs will not be fully reciprocal.”
The universal tariffs will take effect at midnight on April 5 (12pm on April 6, Singapore time), while the reciprocal tariffs will go into force at midnight on April 9.
Before the announcement, Mr Trump's staff stated that reciprocal rates were calculated using a variety of criteria, including the country's tariff rates, value-added taxes, non-tariff measures such as subsidies, and foreign currency policies.
The current round of tariffs adds to the 25% tariffs on steel and aluminum imports that went into effect on March 12, as well as the same rate on foreign autos that will go into force this week.
Analysts have compared the impact of the tariffs to the Smoot-Hawley Tariff Act of 1930, which slapped 20% duties on most imports and led to the Great Depression. Mr Trump has long said that a lack of reciprocity is to blame for a "large and persistent annual trade deficit that's gutted industries and hollowed out key workforces". Economists question several of these assumptions, pointing out that the impact includes inflation and may cause a recession.
Mr Trump has also touted the tariffs as an incentive for foreign companies to move their operations and manufacture their products in the United States. Several prominent corporations have announced plans for fresh investments totaling hundreds of billions of dollars.
However, Dr Marcus Noland, a senior scholar and executive vice president at the Peterson Institute for International Economics in Washington, believes that the tariffs will not significantly boost US manufacturing.
"The modelling work that I've done, examining various tariff proposals, does not show that revitalisation of manufacturing occurring," he told me.
"To the contrary, it shows that these proposals are likely to reduce the role of manufacturing in the economy by making the US a high-cost location for production," she said.
"If it boosts anything, it'll boost economic activities that are not tradable across international borders, things like real estate, hotels, retail and restaurants."
Resources would flow into the service sector as the dollar appreciates, making it more difficult for the US to compete in internationally traded goods, he said.
According to economists, tariffs can lead the US dollar to rise by boosting the cost of imports, reducing demand for foreign goods, and reducing the need to sell dollars for foreign money. The decreasing supply of US dollars may raise the currency's value.
Dr. Philip Luck, former deputy chief economist at the State Department during the Biden administration, stated that even if manufacturing recovers, jobs may not.
“The US is still the second-largest manufacturing economy in the world. But the problem is, manufacturing is done by machines and automation. So we can bring back a lot of manufacturing, but you’re not going to bring back a lot of jobs,” he said.
WhatsApp
Instagram
Threads
