Gan Kim Yong, Singapore’s deputy prime minister, during a panel session, at the World Economic Forum (WEF) in Davos, Switzerland, on Tuesday, Jan. 21, 2025.
Stefan Wermuth | Bloomberg | Getty Images
Asia will remain a “beacon of growth opportunities” despite escalating global trade tensions, according to Singapore’s Deputy Prime Minister Gan Kim Yong.
“Even if some of us in Asia may not be directly affected, the impact of rising tariffs and trade wars could cause major disruptions to supply chains, slow down trade and investment flows and significantly set back the growth of global economy,” Gan said at CNBC’s CONVERGE LIVE in Singapore on Wednesday.
He added “many of us in Asia watched with anxiety President Donald Trump’s tariffs on the U.S.’ three largest trading partners, and its plans for more, including reciprocal tariffs to match the duties on U.S. exports.”
Gan’s speech comes after the U.S. increased tariffs, then reversed course on Canada’s steel and aluminum exports early Wednesday, following Ontario’s reversal of reciprocal energy tariffs on the U.S. today.
The deputy prime minister said that there is “good reason” to remain optimistic on Asia, pointing out that Asia’s economy is projected to expand from around 50% of the world’s GDP today to about 60% by 2030.
Southeast Asia, where Singapore is located, is projected to become the fourth largest economy in the world by 2030 too, he noted.
Speaking to CNBC last month, the deputy prime minister said while direct impact from U.S. tariffs on Singapore will likely be “limited” as the country runs a trade deficit with the U.S., the ramifications can not be underestimated in the longer term.
In 2024, the U.S. had a trade surplus with Singapore of $2.8 billion.
Supply chains and trade patterns will shift, as companies assess locations for their production base, causing “greater friction and greater cost” in the global economy that may slow it down, he said.
Singapore’s economy ended last year on a positive note with gross domestic product expanding 4.4% in 2024, its fastest growth since 2021, boosted by wholesale trade, finance, insurance and manufacturing sector.
The sharp rebound last year may falter this year given it is one of the most trade-exposed economies in the region, with trades accounting for three times of GDP, making it vulnerable to the rise in protectionism.
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