The Singapore Economic Resilience Taskforce (SERT) saw some recent changes in the composition of its members, but its primary goal – to help Singapore businesses and workers navigate the uncertainties caused by rising trade protectionism and geopolitical developments – remains intact. Separately, each of the entities with representation in SERT has been going about its regular order of business to support its members.
On May 22, the Singapore Business Federation (SBF) launched the Navigating U.S. Tariffs Playbook, a practical guide designed to help Singapore businesses understand, respond to, and plan for the impact of recent tariff changes introduced by the US. This initiative comes as an SBF poll reveals significant concerns among local companies about the potential negative effects of these new tariffs on their operations and financial health.
In the poll of business leaders conducted from April 11 to 23, SBF received almost 300 responses from businesses across all key industries. They comprised 81% small and medium-sized enterprises (SMEs), and 19% large enterprises or multinational corporations (MNCs).
Four in five businesses (81%) expect the US tariffs to negatively impact their operations in the next six months, with 28% anticipating a very negative impact. MNCs viewed it more negatively (89%) compared to SMEs (78%). Half the respondents reported having direct or indirect exposure to the US market, with nearly one in five (18%) of these businesses deriving more than half of their annual revenue from it. MNCs are more exposed to the US market (62%) than SMEs (50%).
In the near term, three in four businesses expect a decline in revenue, and one in two foresees an increase in operational costs. Two in five businesses are already feeling the effects of the tariffs, with SMEs more acutely impacted (40%) than MNCs (31%). Beyond pricing, top concerns include currency fluctuations (60%), supply chain reconfigurations (51%), and the risk of retaliatory measures (45%). In response, while seven in 10 businesses plan to raise prices, many will absorb at least part of the cost increases to remain competitive.
Cashflow for one in two businesses is impacted by delayed/postponed/reduced orders from customers and volatility of ordering patterns and extended payment terms. As a result, three in five businesses anticipate an increased need for working capital. More SMEs (24%) reported a significantly increased need compared to MNCs (14%).
Among the top asks of government are tax reliefs, financial assistance, regulatory flexibility, and workforce support. Seven in 10 businesses expressed a desire for timely updates and clearer guidance on evolving global trade regulations and Free Trade Agreement (FTA) compliance.
The playbook, produced by SBF’s Centre for the Future of Trade and Investment (CFOTI), in collaboration with partners including DBS Bank, DHL Express Singapore, Pacific International Lines, PwC Singapore, and Rajah & Tann Singapore LLP, features a structured, time-phased response framework to help Singapore companies, especially SMEs, act decisively in the face of these trade disruptions. It lays out a series of actions across three timed horizons, namely:
1) Make sense (0–3 months)
This initial phase focuses on conducting risk mapping, financial assessments, and contractual reviews to stabilise operations and clarify exposures. It includes recommendations on Harmonised System (HS) code analysis and foreign exchange (FX) exposure.
2) Take action (4–12 months)
The second phase guides businesses in reconfiguring supply chains, tapping on Singapore’s FTAs, securing financing, and adapting commercial strategies. Strategies cover dual sourcing and using tariff-neutral hubs.
3) Plan ahead (beyond 12 months)
The final phase emphasises building long-term resilience through digitalisation, innovation, market diversification, and business model transformation. Recommendations include green finance and digital supply chain integration.
“The on-again, off-again erratic tariff policies by the US have created deep uncertainty for Singapore businesses,” says Kok Ping Soon, Chief Executive Officer of SBF, referencing the poll findings which show strong concern across both SMEs and MNCs, particularly those in trade-reliant sectors. “More than the actual tariffs, it is the uncertainty over the final outcome that is paralysing business investment.”
The playbook aims to offer practical, time-phased guidance for companies to take concrete steps in the face of uncertainty. It gives users a structured way to assess where they stand, what they can do, and how to prepare for the longer-term shifts in global trade. “It’s not about reacting – it’s about repositioning,” explains Mr Kok. “In today’s more fragmented global trade environment, Singapore businesses must make sense of risks, take bold action, and plan ahead for resilience,” he adds.
CFOTI will be conducting workshops and briefings to update businesses on tariff rules interpretation, FTA utilisation and trade compliance. The sessions will be complemented by support from its network of strategic partners, including legal, financial, and logistics specialists, who can assist with contract reviews, financing arrangements, and supply chain restructuring.
© 2024 Institute of Singapore Chartered Accountants
