- US tariff of 12.5% on Singapore exports, linked to forced labour concerns, has taken effect, impacting businesses that serve the US market.
- A US Federal Register notice published on July 23 listed Singapore among 45 economies facing the new duty following a probe by the Office of the US Trade Representative.
- Singapore Business Federation (SBF) has called for clear guidance and adequate transition periods for businesses affected by the tariff.
- Businesses are experiencing an operational squeeze due to the new tariff, with some reporting significant drops in revenue.
- About a third of Singapore’s domestic exports to the US are now subject to the Section 301 export tax, replacing a previous 10% global levy.
- Singapore businesses do not condone forced labour and support efforts to uphold responsible and ethical supply chains, according to SBF.
- SBF advised companies to review product classifications and assess export exposure to understand the implications of the new tariff.
- Mark Lee, Chairman of SBF, stated that the government has been mindful of the potential impact on companies and Singapore's position as a global trading hub.
- The latest tariff will create a price disadvantage for those in traditional sectors compared to competitors in Malaysia.
Singapore businesses are facing significant operational challenges as a new 12.5% US tariff linked to forced labour concerns takes effect. The Singapore Business Federation (SBF) has urged for clear guidance and adequate transition periods to help companies navigate the regulatory landscape.136
The tariff, which affects about a third of Singapore's domestic exports to the US, was implemented following a probe by the Office of the US Trade Representative (USTR). This new duty replaces a previous 10% global levy that expired last week, intensifying the operational squeeze on businesses, particularly in traditional sectors.45
Mark Lee, Chairman of SBF, stated, “Singapore has not introduced an import prohibition on goods produced with forced labour, and we appreciate that the government has been mindful of the potential impact on our companies and Singapore's position as a global trading hub.” The SBF has advised companies to review product classifications and assess the implications for pricing and supply chains.78
The impact of the tariff is already being felt, with reports indicating that some businesses have seen a drastic reduction in revenue. One business owner noted, “Last time, I (would) do about US$8 million (S$10.3 million) in business. This year, I’m doing probably US$2 million to US$3 million tops.” The 12.5% tariff poses a 2.5% price disadvantage for those in precision engineering and specialty chemicals compared to competitors in Malaysia, who are taxed at 10%.9
The SBF's call for guidance highlights the urgent need for clarity as businesses adapt to these new challenges.
“The Singapore Business Federation (SBF) highlighted that about a third of Singapore's domestic exports to the US are now subject to the new tariff, which replaces a previous 10% global levy. Mark Lee, Chairman of SBF, emphasized the need for clear guidance and adequate transition periods to help businesses navigate the regulatory changes.”
