- The U.S. plans to impose 100% tariffs on branded pharmaceuticals that are not manufactured in the U.S.
- Singapore exports S$4 billion of pharmaceuticals yearly, facing risks from rising tariffs.
- Gan Kim Yong seeks U.S. preferential treatment to safeguard Singapore’s competitiveness.
Singapore's Deputy Prime Minister Gan Kim Yong stated that pharmaceutical companies in Singapore are looking for clarification on their eligibility for an exemption from the high US tariffs the United States has placed on their products.
Singapore sends around S$4 billion ($3.10 billion) worth of pharmaceutical goods to the U.S., with the majority being branded medications, Gan, who is also the trade minister, informed reporters. On Thursday, U.S. President Donald Trump declared that a 100% tariff will be imposed on imports of branded pharmaceuticals unless they establish manufacturing operations in the U.S.
Gan stated that this is a worry for Singapore since pharmaceuticals account for approximately 13% of all exports to the U.S. He mentioned that numerous pharmaceutical companies in Singapore already have strategies to grow or establish their presence in the U.S., potentially making them eligible for a tariff exemption.
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"Ultimately, we hope to be able to have an arrangement with the U.S. to allow us to continue to be competitive in the U.S. market, to allow our pharmaceutical companies to be able to continue to export to the U.S. market. As to whether the tariff rate will be 15% or any other tariff is something that is part and parcel of the negotiation, but we do look forward to having some preferential treatment versus the current top-line tariff the U.S. has imposed," said Gan.
Despite a free trade agreement established with Singapore in 2004, the U.S. imposes a 10% baseline tariff on exports from the island nation. Wider sectoral tariffs might negatively impact the demand for Singaporean goods, such as semiconductors, consumer electronics, and pharmaceutical products, which the central bank noted in July make up approximately 40% of exports to the U.S.
The actual U.S. tariff rate on Singaporean exports increased to 7.8% in July, up from 6.8% in April, due to the implementation of increased steel and aluminum tariffs.