SINGAPORE, Sept 27 — A looming wave of US-imposed tariffs has sent ripples through Singapore’s pharmaceutical sector, which exports close to S$4 billion (RM13 billion) worth of high-value, branded drugs to the United States annually.
Deputy Prime Minister Gan Kim Yong, who also serves as Singapore’s Trade Minister, addressed growing concerns today, stating that pharmaceutical companies here are actively seeking clarity on whether they may qualify for tariff exemptions following the abrupt announcement by US President Donald Trump.
Last Thursday, President Trump unveiled a 100% import duty on branded drugs, targeting pharmaceutical firms that don’t manufacture within the United States. The policy is part of a broader push to bring drug production back onshore — but it could significantly impact trade partners like Singapore.
“This is a serious concern for us,” said DPM Gan. “Pharmaceuticals account for around 13% of all Singapore exports to the US, and a blanket tariff could disrupt both revenue and long-standing trade relationships.”
However, Gan offered a measure of optimism, noting that many pharmaceutical firms based in Singapore already have plans to expand or invest in the US market, which could potentially qualify them for exemptions from the harsh tariffs.
He also confirmed that ongoing trade discussions with the US are underway, including sectors beyond pharmaceuticals. “We are working closely with US officials to explore arrangements that would allow Singapore to remain competitive in the US market,” Gan said, referencing his meeting with US Commerce Secretary Howard Lutnick in August.
While the details are still under negotiation, Gan hinted at the possibility of preferential treatment being granted to Singapore in the final tariff structure. “Whether it’s 15%, 10%, or another figure, these are discussions we’re engaging in earnestly — but the goal is clear: to protect our industries and ensure a sustainable path forward,” he said.
Even with a Free Trade Agreement in place since 2004, Singapore’s exports to the US currently face a 10% baseline tariff. In recent months, broader trade measures — including steel and aluminum tariff hikes — have raised Singapore’s effective export tariff rate to 7.8% in July, up from 6.8% in April.
This could have a wider ripple effect. Semiconductors, consumer electronics, and pharmaceutical goods together make up nearly 40% of Singapore’s exports to the US, according to the central bank’s July report. If tariffs remain or worsen, demand for Singaporean products could take a substantial hit.
