The USA’s new tariff policy threatens approximately USD 3.1 billion worth of Singapore’s pharmaceutical exports, according to Singaporean authorities, with trade discussions between the two nations currently underway. Singapore exports close to S$4 billion (equivalent to about USD 3.1 billion) of pharmaceutical products to the USA market, representing roughly 13 per cent of its total exports to the country.

Under the new directive, the USA will impose steep duties—up to 100 per cent—on branded drugs imported from firms that do not have a manufacturing presence in the USA. Singapore’s Deputy Prime Minister and Trade Minister, Gan Kim Yong, has raised concerns over the potential impact on the country’s pharmaceutical sector and has sought clarification on whether companies investing in USA operations might qualify for exemptions.

Despite Singapore and the USA having shared a free trade agreement since 2004, Singaporean exports are still subject to a 10 per cent baseline tariff. With the new levies layered on top, the effective tariff burden on Singapore’s exports has already risen: the rate increased from 6.8 per cent in April to 7.8 per cent in July, influenced by broader tariff escalations affecting steel, aluminium and other sectors.

Officials from both countries are currently negotiating possible arrangements that could help Singapore’s pharmaceutical firms remain competitive in the USA market. Among the options being considered is preferential treatment for exporters that establish production capabilities in the USA, which might secure them exemptions from the full duty.

Industry experts view this as a pivotal moment, with much depending on the outcome of the trade negotiations and the final criteria for tariff exemptions. The uncertainty presents a significant challenge for Singapore’s standing as a reliable exporter of high-value pharmaceuticals, testing its ability to adapt to rapidly changing global trade pressures.