Singapore faces $7.4 bn hit from new US 12.5% tariff

About one‑third of Singapore’s exports to the United States, worth S$9.5 billion (US$7.4 billion), will be subject to a new 12.5% tariff imposed on July 24 under Section 301 of the U.S. Trade Act. Trade Minister Gan Kim Yong said the tariff will mainly affect exports such as optical instruments and chemical products.

Exports that are exempt include energy and energy‑related products, certain electronics, aerospace goods, semiconductors and pharmaceuticals. The United States justified the measure by noting that Singapore does not have legislation prohibiting the import of goods produced with forced labour and lacks a reciprocal trade agreement requiring such a law. Gan emphasized that none of the 60 economies targeted by similar tariffs – including the EU and China – received a full exemption.

Singapore maintains there is no evidence of forced‑labour goods in its trade. The minister warned that any future agreement with the United States could involve commitments beyond an import ban, such as export controls or restrictions related to third countries. With annual goods and services trade of around S$2.5 trillion (S$1.4 trillion in merchandise), the tariff could have significant implications for the city‑state’s open trading system. The U.S. recorded a trade surplus of US$3.6 billion with Singapore in 2025.