Malaysia
Singapore
Philippines
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- End of Globalization Era: PM Wong warns that the global shift toward protectionism, led by U.S. tariffs under Trump, signals the decline of free trade.
- WTO’s Weakening Role: The U.S. has bypassed WTO rules through “reciprocal tariffs,” undermining the organization’s authority and dispute system.
- Singapore Rejects Retaliation: Despite facing tariffs, Singapore will not retaliate, opting to preserve its trade openness and long-term strategic interests.
- Global Growth at Risk: Protectionist policies disrupt supply chains, raise consumer prices, and deter investment, slowing global economic growth.
- Singapore’s Vulnerability: Exports were a key driver of Singapore’s 4.4% GDP, Singapore is highly exposed to global trade shocks and must diversify and adapt.
- Historical Warning: PM Wong draws parallels to 1930s protectionism, cautioning against repeating mistakes that led to economic collapse and war.
- Call for Unity: He urges Singaporeans to remain united and resilient, leveraging the nation’s strengths to navigate global instability.
Table of Contents
1. The World Enters a New Era of Protectionism, Globalization, and Ending Free Trade
Prime Minister Wong began his statement by highlighting a major shift in global dynamics: the decades-long era of globalization and free trade seems to be coming to an end.
Protectionism, characterized by policies such as high tariffs and import restrictions, is re-emerging as a trend in many countries, including the United States (US), under Donald Trump’s leadership.
Protectionism is nothing new. History shows that similar policies were implemented during times of economic instability, such as during the Great Depression in the 1930s.
However, globalization has created highly integrated supply chains in this modern era. When major countries like the US implement protectionist policies, it can disrupt the flow of goods, services, and investments globally.
According to PM Wong, the world must prepare for the impact of this shift, including the potential for rising goods prices and a slowdown in global economic growth.
Source: WTO.ORG
2. WTO Fails to Stop US “Reciprocal” Tariffs Against Various Countries
PM Wong’s second point was the failure of the World Trade Organization (WTO) to prevent the US from implementing so-called “reciprocal tariffs.”
These tariffs are imposed by the US in response to countries deemed to be imposing high tariffs on US products. In his campaign, Trump often alluded to injustices in international trade, where the US was considered “harmed” by other countries.
Structure of the WTO and how the dispute settlement system works. Source: WTO.org
The WTO, which is supposed to guard global trade rules, seems to be losing its authority.
The WTO dispute settlement system has been weakened, especially after the US blocked the appointment of new judges to the WTO’s appellate body.
As a result, countries like the US can freely implement tariff policies without fear of meaningful sanctions. This situation poses a serious threat to Singapore, which is heavily dependent on multilateral trade.
3. Singapore Will Not Retaliate Against US Tariffs Even If They Are Only 10%
PM Wong emphasized that Singapore would not follow in the US’s footsteps by implementing retaliatory tariffs, even though the US tariff imposed was only 10%.
He says other countries might do the same, worsening the situation. Singapore’s approach is to maintain openness in trade, even in the face of global pressure.
This decision reflects Singapore’s long-term strategy as a global trading center. With an economy heavily dependent on exports and imports, protectionist policies can hurt Singapore more than they benefit it.
Instead, Singapore chooses to strengthen trade relations with other countries through bilateral and multilateral agreements, such as ASEAN or RCEP (Regional Comprehensive Economic Partnership).
4. Global Trade and World Investment Will Suffer, Global Economic Growth Slows
PM Wong’s fourth point is the broad impact of protectionist policies on global trade and investment.
When major countries like the US impose tariffs, they affect their direct trading partners and create a domino effect around the world.
For example, tariff increases can raise production costs, which in turn raise the price of goods for consumers.
In addition, uncertainty in global trade can make investors hesitant to invest in international markets.
For Singapore, one of the world’s financial centers, a slowdown in global investment can significantly impact the domestic economy. PM Wong emphasizes the importance of international cooperation to prevent a more severe economic slowdown.
5. Singapore Will Be Greatly Affected by Its Dependence on Global Trade
Singapore is a small country with an open economy and highly dependent on global trade.
Exports were a key driver of Singapore’s 4.4% GDP growth in 2024, along with tourism, and Singapore’s port is one of the busiest in the world. Therefore, any disruption in global trade, such as tariff increases or trade wars, will have a major impact on the country.
PM Wong emphasized that Singapore must remain adaptive and resilient in the face of these challenges.
One strategy is to diversify trading partners and strengthen sectors that are less dependent on trade, such as technology and financial services. However, he also acknowledged that no country is completely immune to global turmoil.
6. A Trade War Like the One That Took Place in the 1930s and Ended with World War II
PM Wong reminded us that trade wars are not a new phenomenon.
In the 1930s, the world witnessed increased protectionism triggered by the Great Depression.
Countries such as the US implemented high tariff policies, such as the Smoot-Hawley Tariff Act, which triggered retaliation from other countries. As a result, global trade plummeted, exacerbating the economic crisis and ultimately contributing to the geopolitical tensions that sparked World War II.
Although the current situation is not as severe as that, PM Wong warned that the world must learn from history.
A prolonged trade war could exacerbate tensions between countries, especially amid already heated geopolitical rivalries, such as between the US and China.
7. PM Wong Calls on Singaporeans to Stand United and Strong in the Face of Global Tensions
Finally, PM Wong called for unity among Singaporeans to face these global challenges. He emphasized the importance of maintaining domestic calm and stability while continuing to strengthen Singapore’s position as a key player in global trade and the global economy.
By uniting, Singapore can better face the rapidly approaching uncertainty.
This statement also reflects PM Wong’s leadership, which focuses on stability and cooperation.
As a small country, Singapore does not have abundant natural resources, but it has advantages in good governance, modern infrastructure, and a skilled workforce. By utilizing these advantages, Singapore can remain relevant on the global stage.
Conclusion
Prime Minister Lawrence Wong’s statement clearly outlines the challenges facing Singapore and the world in the face of Trump’s tariff policies and protectionism trends.
From threats to global trade to lessons from history, PM Wong calls for a thoughtful and collaborative approach.
The key to survival for Singapore is to remain open, adaptive and united. Amid global uncertainty, the role of a small country like Singapore in maintaining the stability of world trade is becoming increasingly important.