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SINGAPORE: The United States will impose a 12.5 per cent tariff on a range of Singapore exports from Friday (Jul 24), with about one-third of the country’s domestic shipments to the US set to be affected, Singapore’s Ministry of Trade and Industry (MTI) said.
The move follows a US Section 301 investigation into 60 trading partners over their alleged failure to enforce bans on imports of goods produced with forced labour.
The US Trade Representative (USTR) concluded in June that 54 of these economies, including Singapore, China and Britain, "failed to impose and effectively enforce a forced labour import prohibition", and proposed a 12.5 per cent tariff on certain goods.
A lower 10 per cent tariff was suggested for 16 economies that were under probe as they have laws explicitly banning imports made with forced labour or committed to prohibiting them.
In response to CNA's queries, Singapore’s Ministry of Trade and Industry (MTI) said that about one-third of the country’s domestic exports to the US will be affected by the tariffs.
Goods that are already subject to the US' Section 232 national security tariffs, such as steel and aluminium, are exempted.
"There are also specific product exemptions such as for energy and energy products, pharmaceuticals and pharmaceutical ingredients, certain electronics, certain aerospace products, semiconductors, and metals used in currency and bullion," said MTI.
Singapore has engaged with the US since the investigation was launched, maintaining that it does not condone forced labour and has a comprehensive framework to tackle such practices domestically.
MTI said it would continue to engage the USTR, adding that further details on the tariff's implementation would be shared when ready.
Foreign Affairs Minister Vivian Balakrishnan said on Thursday that Singapore had told the US it has "no technical or economic basis" for imposing tariffs on it.
"I made a point quite categorically that the US has a surplus, a trade surplus against us. In fact, it is growing," Dr Balakrishnan said after meeting US Secretary of State Marco Rubio on the sidelines of the 59th Association of Southeast Asian Nations (ASEAN) Foreign Ministers' Meeting.
"Nevertheless, you know as well as I do that the American administration, for its own domestic political reasons, needs to raise tariff revenue," he said.
Speaking on America’s trade surplus with Singapore, the minister said he was trying to find a way to show the US that his country is not their target.
“But we also need to make sure we don't become collateral damage in the overall scheme in which tariffs are going to be raised by the US with all its trading partners," he added.
The new tariffs will take effect on Friday, the same day a separate round of global duties introduced earlier this year by US President Donald Trump is set to expire. Officials said the latest measures are designed to be more resilient to legal challenges.
Goods already subject to sector-specific tariffs – such as steel and aluminium – will not be affected.
Goods entering under the US-Mexico-Canada free trade pact will also be exempt, a US official told reporters.
TRADE RESTRICTIONS NEED TO BE "CAREFULLY CONSIDERED"
MTI told CNA that Singapore remains committed to upholding high labour standards globally and working with the international community to develop measures that address goods produced with forced labour.
"Forced labour in complex and multi-tiered international supply chains is a transnational issue that requires international cooperation and is most effectively addressed at source," it said.
It added that given Singapore's position as a major trading hub, any trade restriction, including a prohibition on goods produced with forced labour, needed to be carefully considered.
The ministry said it would continue to consider this in close consultation with the Singapore Economic Resilience Taskforce and the business community.
"Singapore does not condone the use of forced labour and has a comprehensive enforcement framework and good track record against such illegal practices within our borders," said MTI.
"Singapore has also consistently played a constructive role in advancing international labour standards to address the issue of forced labour."
The country, alongside 15 other economies, is also subject to a US probe related to structural excess capacity and production in its manufacturing sectors.
The findings and proposed actions of this investigation have not been released, said MTI.
