FX.co ★ Singapore Flags Downside Risks from U.S. Tariffs

The Monetary Authority of Singapore (MAS), in its macroeconomic review released on Monday, cautioned that the intensifying trade tensions, highlighted by increased U.S. tariffs and corresponding retaliations, could have profound effects on the global economy. While there is an immediate impact from a 10% baseline tariff on Singapore's exports to the U.S., the central bank also emphasized the broader, indirect consequences. These tariffs are effectively acting as a production tax, adversely affecting corporate earnings, profits, and overall demand. Last year, Singapore reported a trade deficit with the U.S., and the nation is currently subject to a 10% tariff on its exports, which will remain in place until July. As a result of these trade barriers, Singapore has adjusted its GDP growth projection for 2025 down to 0%-2%, identifying tariffs as a significant threat. MAS highlighted that the U.S. represents 11% of Singapore's export market, with approximately 55% of those exports impacted by these tariffs. Concurrently, Singapore is poised to conduct a general election on May 3, amidst prevailing economic uncertainties and pressures on the cost of living.