REUTERS NEXT - Singapore must develop deeper relationships with China, US, Europe: home affairs minister
"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," said Shanmugam, pointing to China, the United States 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 U.S. was an indispensable nation and its policies impact "every country, allies and non-allies alike", especially for a trade-reliant country like Singapore where external trade is 3 to 4 times its GDP.
On Monday, U.S. President Donald Trump sent letters to 14 countries, including allies Japan and South Korea, notifying them of tariffs of 25% to 40% that will kick in from August 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 U.S. to cut China out of supply chains.
Singapore has not received a letter from the Trump administration this round. In April on what Trump called "Liberation Day", Singapore was hit with a 10% baseline tariff, lower than its Southeast 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%-2% growth from 1%-3% after the U.S. announced tariffs.
The U.S. had a goods trade surplus of $2.8 billion with Singapore last year, an 84.8% increase over 2023, according to the United States Trade Representative website.
The city-state's data, which includes services, showed the U.S. trade surplus with Singapore amounted to $30 billion in 2024.
The U.S. accounted for 11% of Singapore's exports in 2024 and about 55% of shipments would be hit with the baseline 10% tariff, estimated the central bank.
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