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Business Times
4 hours ago
- Business
- Business Times
Singapore must develop deeper ties with China, US, Europe: Shanmugam
[SINGAPORE] In a multipolar world, small countries such as Singapore have to develop even deeper relationships with other nations, Singapore's Home Affairs Minister K Shanmugam said on Wednesday (Jul 9). '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. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up 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
Business Times
4 hours ago
- Business
- Business Times
Casinos stay robust in Singapore, Malaysia as Cambodia, Thailand take hits: S&P Global
[SINGAPORE] The casino and gaming industry looks set to remain resilient in some Asean economies, a report by market intelligence provider S&P Global indicated on Tuesday (Jul 8). This is despite increased volatility in the macro environment, as tariffs and labour constraints continue to bring uncertainty. Industry revenues continue to be propped up by a premium mass gaming market in the region, noted S&P Global analyst Ong Hwee Yee. Pointing out that gaming as a product has high stickiness, she said: 'Affluent players may be less exposed to a weakening economy than the lower-income groups... Players return and remain engaged.' In particular, gross gaming revenue (GGR) in Singapore, Malaysia and the Philippines is expected to approach, or even surpass, pre-pandemic levels, she added. This is based on improved visitation numbers and a strong domestic market providing a boost to industry players. Moreover, the return of Chinese tourists to South-east Asia is key to this recovery, the analyst said, noting that Chinese visits to Malaysia and Singapore have reached pre-pandemic figures. Singapore had a surge in Chinese players following the introduction of visa-free travel for such tourists last February, driving a 50 per cent year-on-year increase in GGR in the first quarter of 2024, the report showed. Malaysia had introduced a similar scheme in December 2023. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Among the major operators in the region's casino sector is Malaysian hospitality giant Genting Bhd, which has a presence in Genting Highlands, Langkawi and Kijal in Malaysia, as well as Sentosa in Singapore. It is considering setting up a casino in the United States, within the state of New York – which S&P Global flags as an 'event risk' that could impact the group's overall revenues. The firm noted that Genting Bhd could establish a strong foothold in the American market if it secures a full casino licence. The new operation could also benefit from Genting Bhd's existing infrastructure and network, as it already has a local presence in the form of Resorts World New York City. However, failing to gain the licence could impede the competitiveness of the group's New York operations, S&P Global said in its report. Uneven recovery Other markets in the Asean gaming industry, such as Cambodia, are expected to have a slower recovery in GGR, Ong said. Often relying on Chinese junkets – all-inclusive trips for VIP players – casinos in these markets have suffered as Chinese authorities crack down on junket operators, which have been associated with money laundering and corruption. This has dealt a heavy blow to the Cambodian gaming market, which has long depended on these trips to draw high-stakes gamblers. Chinese junket operators accounted for about 70 per cent of Cambodia's GGR in 2019, S&P Global noted. Over in Thailand, hopes that the government would legalise casinos were dashed, as the flagship Bill of suspended prime minister Paetongtarn Shinawatra was dropped on Tuesday. The Cabinet withdrew the Bill, as it 'needs more studies that require further understanding and social context', government spokesperson Jirayu Huangsab said. Most forms of betting are illegal in the kingdom. Paetongtarn's Pheu Thai party had argued that casinos could provide a significant boost to the country's faltering tourism sector, which this year reported a significant dip in visitor numbers, contributing to the country's economic woes. Julapun Amornvivat, Thailand's deputy finance minister, said the authorities 'accept it's not the appropriate time'. 'It's a shame, the delay is a lost opportunity for the country,' he added. S&P Global's Ong said the 'market potential is massive', if Thailand were to pass such a Bill. However, the move could also threaten operations in nearby markets, she added. Enhancements to regional casino operators' existing assets could mitigate this risk, the analyst said, citing Marina Bay Sands' and Resorts World Sentosa's multibillion-dollar upgrades.
Business Times
14 hours ago
- Business
- Business Times
Trump unveils latest tariff rates for six countries
[WASHINGTON] US President Donald Trump unveiled a new round of tariff demand letters on Wednesday (Jul 9) with levies set to hit in August on imported goods from partners who fail to reach agreements with the US. Trump said he would levy a 30 per cent rate on Algeria, Libya and Iraq, with 25 per cent duties on products from Brunei and Moldova and a 20 per cent rate on goods from the Philippines. The levies were largely in line with rates Trump had initially announced in April, though Iraq's duties are down from 39 per cent, while the Philippines rose from 17 per cent. Trump began notifying trading partners of new rates on Monday ahead of a deadline this week for countries to wrap up trade negotiations with his administration. But the president also extended that deadline from Wednesday to Aug 1 in an executive order effectively giving trading partners an extension for talks and initially fuelling scepticism on Wall Street that he would follow through on his import taxes. Trump added to that uncertainty earlier this week by claiming he was 'not 100 per cent firm' on that new cut-off date for talks. He has since sought to signal to investors and trading partners that he is committed to carrying out his tariff threats, vowing Tuesday that 'all money will be due and payable starting AUGUST 1, 2025 – No extensions will be granted' on country-specific levies. The president also raised the stakes for two key trading partners, saying the European Union could receive a unilateral tariff rate soon despite progress in negotiations and vowing to hit India with an additional 10 per cent levy for its participation in the Brics bloc of developing nations, which Trump sees as threatening the US dollar's status as the world's key currency. And he raised the spectre of more industry-specific tariffs, floating a 50 per cent rate on copper products that sent that metal climbing as high as 17 per cent in New York on Tuesday, a record one-day spike. He also pitched tariffs as high as 200 per cent on pharmaceutical imports if drug companies don't shift production to the US in the next year. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up The barrage of letters and fresh tariff threats marked the latest turn in a dizzying trade agenda that has spurred volatility in markets and left consumers, businesses and trading partners anxious about the impact on trade flows and the global economy. He initially announced the so-called reciprocal tariffs on April 2, but after markets reacted with alarm, paused the higher duties to 10 per cent for a 90-day negotiating period that was set to end on Wednesday, July nine before the latest three-week extension. Trump's letters on Monday targeted countries including Japan, South Korea, South Africa, Indonesia, Thailand and Cambodia. Most of the tariff rates, however, were largely in line with what Trump had already announced the nations were likely to face. While Trump has touted his tariff notification letters as deals, even the actual agreements he has managed to strike during the negotiating period with the UK and Vietnam have been far short of comprehensive, leaving many details unclear. Trump also secured a truce with China to lower rates and ease the flow of critical Earth minerals. BLOOMBERG
Business Times
a day ago
- Business
- Business Times
Malaysia's data centre dreams hit by tariffs, chip ban fears
[KUALA LUMPUR] Rising electricity tariffs and the proposed US ban on artificial intelligence (AI) chip exports to South-east Asia are raining on the parade of Malaysia's booming data centre sector, as the dual pressures force hyperscale operators to reassess the country's value proposition as a digital investment hub. Still, some observers reckon Malaysia's dominant position in emerging South-east Asia is unlikely to be dramatically shaken, as demand for cloud computing remains robust. While industry experts point out that the US move to curb AI chip exports from Malaysia – part of efforts to stop suspected smuggling into China – is still a draft and remains speculative, its chilling effect, combined with a sharper-than-expected power tariff hike just this month, is already cooling the gold rush. 'Malaysia has seen some slowdown as a 'gold-rush' phenomenon in 2023 and 2024, which probably led to some point of diminishing return,' said Gary Goh, director and founder of data centre advisory firm Sprint DC Consulting. He added: 'Within Asia-Pacific, locations such as Thailand, South Korea and Japan have seen a lot of investment this year.' Power-hungry data centre operators in Malaysia are facing higher costs with the newly announced electricity tariffs targeting facilities with capacities above 100 megawatts (MW). According to reports, the move could drive energy costs up by as much as 10 to 14 per cent. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up For a typical 100-MW hyperscale facility and before the recent tariff restructuring, this translates to an annual energy bill of about US$130-150 million in Malaysia, noted Goh, adding that the new tariffs could push electricity bills up by 10 to nearly 16 per cent for a data centre running at average utilisation. 'This development is expected to have a negative impact on data centre projects in the short term as platforms put their pipelines on hold, in anticipation of further clarity on the price bands being employed to calculate the power bills,' said BMI in a recent report. 'This risk is expected to be greatest for data centres targeting AI applications, as they also look to balance the impact of a potential restriction of US-supplied graphics processing units,' it continued. Several major operators with projects exceeding 100 MW include DayOne, EdgeConnex, Yondr, AirTrunk, STT and Vantage, according to the research unit. 'We do not expect these platforms to completely exit the market; rather, platforms will adapt their pipelines coming to market to comply with sustainability-linked standards,' said BMI. Like Goh, BMI noted that investments could potentially shift to surrounding markets, such as Indonesia and Thailand, as investments gradually divert to less-regulated peer markets that can still service digitally mature economies. Added layer of uncertainty According to Goh, the recent tariff hike compounds existing cost pressures. When Malaysian sites commit to 24/7 renewable energy coverage to meet environmental, social and governance requirements, developers must underwrite 100 per cent of the renewable output while also paying for conventional standby capacity. Goh noted that renewable energy often commands a premium, depending on oil price cycles, workload predictability, and whether the source is onsite or offsite – especially when compared to the current five-year low of conventional floating power prices. 'Malaysia's power pricing volatility adds another layer of uncertainty for operators planning long-term power purchase agreements. Fuel surcharge jumped from 3.7 sen per kilowatt-hour in 2022 to 20 sen in 2023 – a 16.3 sen increase,' he noted. The shine remains Between 2021 and 2024, Malaysia attracted 2 to 5 gigawatts worth of investment inquiries, led more by its proximity to Singapore, political stability, and whole-of-government support than by competitive electricity rates, Goh said. Immediate-term cost pressures aside, he stressed that data centre investments follow a different timeline than typical commercial decisions. 'Power prices are dynamic and short term; data centre investment is a 25-year decision (commitment),' he said, noting how Singapore continues to attract interest despite high tariffs and government-imposed moratoriums. 'Malaysia's challenge is to make its long-term case compelling again,' he added. For now, Malaysia remains a magnet for data centre investments. Although the new power tariffs could pose short-term hurdles for data centre projects in Malaysia, BMI expects the country to retain its leading position in emerging South-east Asia on the back of strong demand for cloud computing. According to Barclays, the rising demand for data and cloud computing is fuelling the need for power and water-intensive data centres across Asia-Pacific. Annual foreign direct investment (FDI) in Apac data centres is projected to reach US$62 billion by 2030, up from US$35 billion in 2024. Malaysia, together with India, stand out as the biggest relative beneficiaries. 'As a percentage of gross domestic product, we think Malaysia will be the biggest beneficiary by the end of the decade, with a bump-up in FDI of potentially 0.4 per cent of GDP from current levels,' said the analysts. Adapt, not exit To mitigate the cost pressures, industry players are adapting through strategic partnerships and technological innovation rather than retreating from the Malaysian market. In June, Bridge Data Centres signed a memorandum of understanding with South Korea's SK Innovation to deploy AI-driven energy management, backup fuel cells and immersion cooling at a major hyperscale facility in Johor, based on a press release. 'Our partnership with SK Innovation reflects our commitment to advancing green energy technologies for data centres, supporting our customers' goals for sustainable and scalable growth,' said Kevin Guan, chief investment officer of Bridge Data Centres.
Business Times
a day ago
- Business
- Business Times
Malaysia calls for stronger inter-Asean trade amid tariffs uncertainty
[KUALA LUMPUR] Malaysia's Prime Minister Anwar Ibrahim on Wednesday urged South-east Asian countries to 'act with purpose' and enhance trade among each other in the face of global uncertainty, as regional foreign ministers met amid renewed jitters over US trade tariffs. Anwar, addressing ministers of the 10-member Association of Southeast Asian Nations, described tariffs, export restrictions and investment barriers as 'the sharpened instruments of geopolitical rivalry'. He did not mention the United States specifically. 'As we navigate external pressures, we need to fortify our internal foundations. Trade more among ourselves, invest more in one another, and advance integration across sectors with resolve,' he said. 'As global conditions remain uncertain, there is no overstressing the need to act with purpose in our own region.' US President Donald Trump on Monday announced hefty levies of between 25 per cent and 40 per cent on six South-east Asian countries, despite concerted efforts by some to offer broad concessions and negotiate lower rates. The export-reliant Asean is collectively the world's fifth-biggest economy, with some members beneficiaries of supply chain realignments from China. Only Vietnam has secured a deal, which lowers the levy to 20 per cent from 46 per cent initially. Indonesia, Thailand and Malaysia are seeking further talks ahead of the tariff implementation on Aug 1. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up The gathering in Kuala Lumpour will be include a flurry of meetings between Asean and its major trade partners, including the United States, China, Japan, Russia, India and the European Union. China's Foreign Minister Wang Yi and Russian counterpart Sergei Lavrov are expected to join from Thursday, as will US Secretary of State Marco Rubio, who makes his first trip to Asia looking to smooth over relations with allies and partners rattled by Trump's tariff strategy. Tariffs 'counterproductive' Asean foreign ministers will express 'concern over rising global trade tensions and growing uncertainties in the international economic landscape, particularly the unilateral actions relating to tariffs,' according to a draft joint communique seen by Reuters. The draft, dated July 7 and before the latest tariff rates were announced, did not mention the United States and used language similar to an Asean leaders' statement in May. Both said tariffs were 'counterproductive and risk exacerbating global economic fragmentation'. The bloc in April said it would not retaliate and its leaders have pledged any bilateral deals they strike with Washington would not harm fellow ASEAN members. OCBC senior Asean economist Lavanya Ventakeswaran said countries including Vietnam face additional uncertainty over tariffs targeting transshipments, a measure aimed at products largely from China, with questions remaining over enforcement and implementation. 'The bottom line is that it's going to be quite complicated moving forward,' Ventakeswaran said. The issue has also been complicated by Trump's initial threat of an additional 10 per cent on tariffs on countries aligned with the Brics grouping. Indonesia is a member, while Malaysia, Thailand and Vietnam are partner countries. ASEAN will promote a treaty on a nuclear weapons-free zone in South-east Asia and the meeting could also see Thailand and Cambodia seek to ease a dispute that led to a mobilisation of their troops at their border and a crisis for a Thai government now hanging by a thread. Thai Prime Minister Paetongtarn Shinawatra has been suspended pending a court case over her leaked phone call with Cambodia's influential former leader, Hun Sen, a conversation her opponents say undermined Thailand's sovereignty and integrity. The dispute puts more pressure on Asean to maintain a united front, amid other unresolved issues including an intensifying civil war in Myanmar and a protracted drafting of a code of conduct with Beijing for the South China Sea, a key source of geopolitical tension. Malaysia's Foreign Minister Mohamad Hasan on Wednesday urged all groups in war-torn Myanmar to create a conducive environment for an election. It was not immediately clear if his remarks indicate Asean chair Malaysia will endorse the election, which critics have derided as a sham to entrench military rule in the absence of opposition parties. REUTERS
