Singapore-based pharma companies waiting for confirmation of US tariff exemptions: MTI
Talks on a preferential tariff arrangement for Singapore’s pharmaceutical exports to the US continue, says Minister of State for Trade and Industry
[SINGAPORE] Many pharmaceutical companies are waiting for confirmation from the US administration on whether their expansion plans qualify them for tariff exemptions, Minister of State for Trade and Industry Gan Siow Huang said in Parliament on Tuesday (Oct 14).
On Sep 25, the US announced a 100 per cent tariff on branded or patented pharmaceutical products with effect from Oct 1, unless companies are building manufacturing plants in the US.
“The implementation of this tariff has since been delayed to allow time for pharmaceutical companies to negotiate exemptions with the US administration,” Gan noted.
Of pharmaceutical companies based in Singapore, many “have plans to build new capacity or expand their existing facilities in the US, and are awaiting further details from the US administration to confirm that their plans would qualify for the tariff exemption”.
She was responding to questions filed by seven Members of Parliament (MPs) on the impact of US tariffs on Singapore’s pharmaceutical sector.
“We are also in discussion with the US administration on a preferential tariff arrangement for Singapore’s pharmaceutical exports to the US and will provide an update when ready,” she added.
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The government does not have a breakdown of Singapore’s pharmaceutical exports to the US by branded and non-branded products, said Gan. But she noted that Singapore mainly exports active pharmaceutical ingredients (API) to the US, instead of finished products such as tablets and capsules.
Between 2022 and 2024, Singapore’s pharmaceutical exports to the US averaged S$3.7 billion a year.
The industry is a key contributor to Singapore’s economy, with eight of the top 10 global pharmaceutical companies having manufacturing and research and development (R&D) activities here, said Gan. She added that Singapore’s economic agencies continue to attract new manufacturing and R&D investments, support local enterprises, and create good jobs for Singaporeans.
“However, the US tariffs and related global developments do point towards a changed world with greater uncertainty.”
“Too early to tell”
Several MPs raised separate supplementary questions on whether the pharmaceutical tariffs would apply to APIs; whether there would be a change in manufacturing and R&D investments in Singapore; and whether the Republic’s medicine availability and drug pricing would be affected.
Gan replied that it is too early to tell, given that Singapore is still in discussions with the US on preferential tariff arrangements.
Louis Chua, Workers’ Party MP for Sengkang GRC, asked if zero tariffs on pharmaceutical exports were still on the cards, as Deputy Prime Minister Gan Kim Yong had signalled in May.
He also asked what Singapore’s “impediments to a deal” are, given that individual companies, as well as the European Union and Japan, have managed to cut a deal with the US.
In reply, Gan Siow Huang reiterated that the negotiations are confidential, but noted that DPM Gan Kim Yong had a virtual meeting with his US counterpart Secretary of Commerce Howard Lutnick just last week.
“We also have to take note that the preferential tariff rates secured by countries like Japan and Korea for their pharmaceutical exports were part of broader negotiations with the US on reciprocal tariffs,” Gan Siow Huang added.
“We have to be realistic at this point, but at the same time, we are working our best to negotiate for the good of our Singapore economy and the companies here.”
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