Singapore must develop deeper ties with China, US, Europe: Shanmugam
'There are more powers playing the game as it were, as opposed to the time when the Americans held the peace across the world. So that's changing, and in such a context, small countries like us have to develop even deeper relationships,' he said, pointing to China, the US and Europe.
Shanmugam, who is also coordinating minister for national security, was speaking in an interview at the Reuters NEXT Asia summit in Singapore that covered trade issues as well as domestic concerns such as a fake news law.
On trade, Shanmugam said the US was an indispensable nation and its policies impact 'every country, allies and non-allies alike', especially for a trade-reliant country such as Singapore where external trade is three to four times its GDP.
On Monday, US President Donald Trump sent letters to 14 countries, including allies Japan and South Korea, notifying them of tariffs of 25 to 40 per cent that will kick in from Aug 1. In the letters, Trump warned that reprisals from countries would draw a like-for-like response.
Meanwhile, China threatened to retaliate against nations that strike deals with the US to cut China out of supply chains. Singapore has not received a letter from the Trump administration this round.
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On Apr 2, a day that Trump called 'Liberation Day', Singapore was hit with a 10 per cent baseline tariff, lower than its South-east Asian neighbours, but high enough to harm the economy said the Singapore government.
The trade ministry in April downgraded the nation's GDP forecast for 2025 to 0 to 2 per cent growth from 1 to 3 per cent after the US announced tariffs.
The US had a goods trade surplus of USUS$2.8 billion with Singapore last year, an 84.8 per cent increase over 2023, according to the US Trade Representative website.
Singapore's data, which includes services, showed the US trade surplus with Singapore amounted to US$30 billion in 2024.
The US accounted for 11 per cent of Singapore's exports in 2024 and about 55 per cent of shipments would be hit with the baseline 10 per cent tariff, estimated the Monetary Authority of Singapore. REUTERS
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