Impact of US Tariff Increases and US Export Declines on Price Pressures for Singaporeans
Ministry of Trade and IndustrySpeakers
Summary
This question concerns the impact of a 10% baseline US tariff and a 9.2% decline in exports on domestic price pressures, particularly for lower-income households. Mr Yip Hon Weng asked about the criteria used to identify inflationary effects and the frequency with which these measures are reviewed. Minister of State Gan Siow Huang responded that tariffs are paid by US importers, meaning direct inflationary impacts are not expected, though the Ministry monitors potential indirect price increases. She noted that import prices and core inflation fell in 2025, with inflation for the lowest 20% income group standing at 0.6%. The Ministry utilizes various indicators to track costs across different household groups and remains ready to provide targeted support to Singaporeans if needed.
Transcript
6 Mr Yip Hon Weng asked the Deputy Prime Minister and Minister for Trade and Industry in view of the 10% US tariff imposed on Singapore and the nearly 30% year-on-year decline in exports to the US (a) what criteria does the Ministry use to determine when such tariff impacts translate into price pressures for everyday Singaporeans, especially lower-income households; and (b) how often are these criteria reviewed.
The Minister of State for Trade and Industry (Ms Gan Siow Huang) (for the Minister for Trade and Industry): Mr Speaker, Singapore's exports to the United States (US) are currently subject to a baseline "reciprocal" tariff rate of 10%. The US has also imposed various Section 232 sectoral tariffs that are applicable to Singapore, such as on steel and aluminum. Singapore's non-oil domestic exports to the US fell by 9.2% year-on-year from April to December 2025.
The tariffs and corresponding decline in exports to the US are not expected to have a direct impact on Singapore's inflation. This is because the tariffs are paid for by the US importers. Nonetheless, there could be an indirect impact if higher prices in the US lead to an increase in the prices of its exports, including to Singapore, in the future.
Thus far, we have not observed any tariff impact on Singapore's import prices, with our import prices falling in 2025. In turn, the decline in import prices helped to lower Consumer Price Index (CPI)-All Items inflation and Monetary Authority of Singapore's Core Inflation to 0.9% and 0.7% respectively last year.
We will continue to closely monitor our import prices and inflation rates and the corresponding impact on Singaporeans, especially those from lower-income household groups, and we stand ready to provide further support if needed.
Mr Speaker: Mr Yip.
Mr Yip Hon Weng (Yio Chu Kang): Thank you, Mr Speaker. I thank the Minister of State for her reply that there is an indirect impact. The Ministry of Trade and Industry regularly assesses macro price pressures, but does the Ministry use indicators to identify disproportionate effects on lower-income households, such as changes in the cost of basic food, transport and utilities?
Ms Gan Siow Huang: The answer is yes, we do look at various indices and indicators to understand the impact of inflation on different household income groups. For example, for the lowest 20% income household groups, we know that last year the CPI-All Items inflation for them was 0.6%. And this is different from that for the middle 60% income group of 0.9%.
We do look into such details, so that we can provide targeted support to Singaporeans, especially those from the lower-income household groups.