The Dawn of a Turbulent Trade Era: PM Lawrence Wong Warns of the Global Impact of U.S. Tariff Escalation

Date: April 9, 2025
Source: Parliament of Singapore (April 8, 2025)

On April 8, Prime Minister and Finance Minister Lawrence Wong delivered a sobering statement in Parliament, warning that the recent U.S. decision to impose reciprocal tariffs may be just the beginning of a broader global shift toward protectionism. He urged Singaporeans and businesses to brace for a more volatile international trade environment.

Several Members of Parliament raised concerns about the potential direct impact of the tariffs on specific local industries. Mr. Wong assured that the government is actively monitoring the situation and engaging with both multinational and local companies. Yet, he emphasized that the greater concern lies not in the immediate business impact, but in the long-term damage to the global rules-based trading system.

“The U.S. move fundamentally undermines the WTO’s Most Favoured Nation principle and opens the door to selective, preference-driven bilateral trade.”
— PM Lawrence Wong

He cautioned that if other countries follow suit, smaller nations like Singapore will face mounting pressure in one-on-one trade negotiations where they lack the bargaining power to secure fair outcomes.

Rising Instability and Global Risk

Drawing parallels to the 1930s Smoot-Hawley Tariff Act, which intensified global economic depression through retaliatory tariff wars, Mr. Wong warned that today’s interconnected global supply chains make the risks even greater. He also reiterated Singapore’s decision to avoid retaliatory tariffs to shield citizens from additional costs.

“We must be prepared for a new era marked by more frequent and unpredictable shocks. Regardless of how external conditions evolve, we must remain resolute and safeguard our national interests.”
— PM Lawrence Wong

U.S.-China Tensions Add to Volatility

Mr. Wong also highlighted the increasing strategic rivalry between the U.S. and China. With the U.S. threatening up to 50% tariffs on Chinese imports and China declaring readiness to respond in kind, global markets are facing heightened uncertainty. Alarmingly, communication channels between the two powers are narrowing, removing important guardrails for stability.

Singapore remains committed to an open and rules-based global trade system, even as it braces for the turbulence of a new era marked by rising protectionism and geopolitical rivalry.