In wake of Trump tariffs, Asean exporters should diversify away from US reliance: panellists
For Singapore, the broader risk is from the politicised and unpredictable nature of the trade actions
[SINGAPORE] Beyond the immediate impact of US tariffs, both Singapore and the wider region must start preparing for deeper shifts in the global trade landscape, said panellists in two recent online seminars.
While US firms are keeping their supply chains in Asean, regional economies should diversify their export markets to reduce their reliance on the US, said speakers at a webinar organised by the European Chamber of Commerce (EuroCham) on Tuesday (Apr 15).
And while Singapore may not be targeted by higher tariffs, the real risk for the trade-reliant city-state is how politicised and inconsistent US trade actions are reshaping the global environment, said participants in a webinar by the Iseas-Yusof Ishak Institute the day before.
Diversifying export markets
The EuroCham session discussed the impact of US President Donald Trump’s so-called “reciprocal tariffs” on the Asia-Pacific region.
Parisha Saimbi, a foreign exchange and local markets strategist for Asia at BNP Paribas, shared findings from a survey conducted before Trump’s Apr 9 announcement of a 90-day tariff delay.
The poll asked global corporations how they intended to respond to the tariffs.
The most common response, chosen by about six in 10, was to raise prices and pass the additional costs on to US consumers. The next most common response was to seek export markets beyond the US.
Among US companies surveyed, most indicated no intention to reshore manufacturing or alter existing supply chains.
“What this tells us is that the US is still likely to maintain the current status quo – continuing to buy from the Asean region and China to the extent that it can,” said Parisha.
Both she and fellow panellist Richard Burn, a senior counsellor for global advisory firm APCO, agreed that in the medium term, regional exporters should look to diversify.
She advised Asean-based businesses to seek non-US export markets, warning of a potentially longer-term shift in global trade policy.
Asean countries should see this as a strategic opportunity to leverage the region’s consumer base – which accounts for 40 per cent of global growth – to reduce their exposure to the US market, she added.
Burn noted that China has been diversifying its export markets beyond the US – including to Asean – and this effort is “now intensifying”.
Loss of goodwill
At Monday’s Iseas webinar, participants noted that while Singapore faces only the baseline 10 per cent tariff, the greater concern is how politicised and unpredictable trade actions are reshaping the global system.
Visiting senior fellow Jayant Menon said that Singapore “has recognised the need to take a strong position” because “this may not be the end of the onslaught” from Washington.
“Everything you hear now might change in an hour or a day,” he said.
Dr Deborah Elms, head of trade policy at the Hinrich Foundation in Singapore, noted how tariffs on electronics were unexpectedly lifted on Friday, only to be reinstated by Sunday under a new semiconductor category.
Such instability dents business confidence, said Dr Luna Ge Lai, a research fellow at the Institute for International Affairs at the Chinese University of Hong Kong.
She noted that the tariffs have prompted many multinational corporations to hold back on decisions.
Professor Hal Hill, emeritus professor of economics at the Australian National University, criticised the Trump administration’s zero-sum approach to trade, saying: “We’re doing deals a la real estate, not what’s in the best interests of the global economy.”
