US and Singapore seek creative trade solutions amid tariff challenges

[SINGAPORE] The United States is keen to explore “creative solutions” to deepen trade ties with Singapore and support the flow of critical exports from the Republic, said Deputy Prime Minister Gan Kim Yong, highlighting the longstanding partnership between the two nations.

Speaking to reporters on April 27, DPM Gan—who also serves as Minister for Trade and Industry—shared details of a recent discussion with US Secretary of Commerce Howard Lutnick. During their call on April 25, DPM Gan outlined the nature of bilateral trade and business relations between Singapore and the US.

The talks come amid shifting global trade dynamics, as the US recalibrates its economic policies to emphasize domestic manufacturing and reduce dependence on foreign supply chains. Against this backdrop, Singapore’s strategic position as a hub for advanced manufacturing and innovation remains vital to ensuring resilient trade channels.

Singapore is currently engaged in negotiations with the US to secure concessions that would safeguard the export of pharmaceuticals—a key sector within Singapore’s economy—DPM Gan revealed.

The discussions also addressed the importance of maintaining access to high-end AI chips for companies in Singapore. These advanced semiconductors are critical for the Republic’s digital economy, particularly in sectors such as artificial intelligence, cloud computing, and advanced research. Ensuring a stable supply of such components is essential to Singapore’s ambitions as a tech leader in the region.

While Secretary Lutnick indicated that the 10 per cent baseline tariff on imports from Singapore and other countries is unlikely to change, he expressed openness to finding alternative ways to strengthen trade, especially in areas deemed critical to Singapore.

“He said he would like to explore creative solutions to see how we can strengthen bilateral trade between Singapore and the US, particularly with regard to critical exports,” said DPM Gan.

One of the key concerns for Singapore is the US’ intention to impose sectoral tariffs on certain imports, such as pharmaceuticals. Given that pharmaceuticals account for over 10 per cent of Singapore’s exports to the US, any disruption could have significant implications for the Republic’s biomedical industry—an industry that supports high-value jobs and drives research development.

On the issue of AI chip access, DPM Gan noted that Secretary Lutnick had broader concerns about export controls, not limited to Singapore. In response, Singapore reiterated its commitment to strict compliance with international export control frameworks.

“We explained our export control system and how we work closely with our US counterparts,” said DPM Gan, adding that Singapore takes violations of such regulations seriously and does not condone companies exploiting its jurisdiction to circumvent restrictions.

According to DPM Gan, Secretary Lutnick was reassured by Singapore’s regulatory approach and expressed willingness to collaborate on ensuring that advanced chips are supplied to trusted end-users.

“On the basis of trust, he is prepared to look at how Singapore can work with the US to strengthen export controls for these high-end AI chips,” said DPM Gan, noting that Secretary Lutnick also suggested joint efforts to secure Singapore’s continued access to such critical technologies.

The tightening of US export controls on advanced semiconductors, aimed at limiting access by geopolitical rivals, underscores the importance of trusted partners like Singapore in global supply chains. Singapore’s alignment with US standards may ease future negotiations on tech-related trade matters.

While there has been some progress in talks, DPM Gan cautioned that significant negotiations remain before a final agreement can be reached. No firm timeline has been established, but both parties are keen to move quickly.

“From the US side, they want to keep it simple and see whether we can resolve discussions very quickly. From Singapore’s perspective, being a small and nimble country allows us to respond quickly,” he said.

DPM Gan’s remarks follow Prime Minister Lawrence Wong’s comments at a PAP rally in Chua Chu Kang GRC on April 26, where he highlighted the trust the US has in Singapore.

PM Wong recounted that Secretary Lutnick had expressed confidence in Singapore and in DPM Gan personally. “Trust Singapore, trust Gan Kim Yong, because of what he represents—the full faith and credit of the Singapore Government,” said PM Wong.

In his capacity as chair of the Singapore Economic Resilience Taskforce, DPM Gan said the panel has developed a list of potential initiatives to support local businesses and workers in navigating tariff-related uncertainties. These proposals have been circulated among task force members for review and industry feedback.

The task force comprises four other Cabinet ministers, as well as leaders from the Singapore Business Federation, the National Trades Union Congress, and the Singapore National Employers Federation.

According to DPM Gan, the proposed measures fall into three main categories: immediate support for companies affected by tariffs, job retention assistance, and long-term transformation efforts for firms impacted by shifts in supply chains and manufacturing bases.

He added that further discussions on these initiatives will be conducted confidentially to protect business competitiveness.

Acknowledging that the tariff situation may affect employment and has already led to a hiring slowdown, DPM Gan said the Government is working closely with businesses across different sectors to tailor support schemes accordingly.

The call with Secretary Lutnick followed earlier discussions DPM Gan held with US Trade Representative Jamieson Greer on April 15. In a LinkedIn post, DPM Gan noted that Ambassador Greer expressed concerns over the US trade deficit in goods and emphasized the US focus on revitalizing domestic manufacturing.

Nevertheless, Ambassador Greer also acknowledged Singapore’s significance as an economic partner and pointed out that the US maintains a trade surplus with Singapore—despite the blanket 10 per cent tariff.