PM Lawrence Wong on implications of US tariffs for Singapore | Full video

The speaker addresses the significant shift in global trade dynamics following the US's recent policy changes, marking an end to rules-based globalization and free trade. This new era is characterized by arbitrary protectionism, posing challenges for small economies like Singapore. The US's move away from the WTO framework towards reciprocal tariffs threatens global stability and risks sparking a trade war. Singapore, heavily reliant on trade, must prepare for potential economic shocks. Despite the challenges, the speaker emphasizes the importance of vigilance, strengthening partnerships, and maintaining unity to navigate the uncertain future.

• The global economic environment is shifting in ways that may negatively impact small, open economies like Singapore.
• The recent Liberation Day announcement by the United States signifies a major transformation in the global order.
• The previous era of rules-based globalization and free trade is transitioning to a more arbitrary, protectionist phase.

"My fellow Singaporeans, I've said before that the world is changing in ways that will disadvantage small open economies like Singapore."

• The speaker emphasizes the challenges faced by small economies like Singapore due to global changes.

"The recent Liberation Day announcement by the US leaves no room for doubt; it marks a seismic change in the global order."

• The US's recent announcement is highlighted as a pivotal moment indicating a shift in global economic policies.

"The era of rules-based globalization and free trade is over. We are entering a new phase, one that is more arbitrary, protectionist, and dangerous."

• The speaker declares the end of the previous global economic era, signaling a move towards protectionism and unpredictability.

• The United States has historically been a cornerstone for free market economies worldwide.
• It has promoted free trade and led initiatives to establish a multilateral trading system with clear rules and norms.
• This system, anchored by the World Trade Organization (WTO), has fostered global stability and prosperity.

"For decades, the US was the bedrock for the free market economies of the world."

• The US's historical role as a foundation for global free market economies is acknowledged.

"It championed free trade and led efforts to build a multilateral trading system anchored by clear rules and norms."

• The speaker notes the US's leadership in creating a structured global trading system.

"This WTO system brought unprecedented stability and prosperity to the world and to the US itself."

• The benefits of the WTO system, including global stability and prosperity, are highlighted.

• While the existing system brought many benefits, it is not without its flaws.
• The speaker acknowledges that the system is imperfect, suggesting room for improvement or reform.

"To be clear, the system is not perfect."

• The speaker admits that the global trading system, despite its advantages, has its imperfections.

• The US is moving away from the World Trade Organization (WTO) framework, opting for a system of reciprocal tariffs on a country-by-country basis.
• This approach signifies a complete rejection of the established international trade system that the US helped to create.
• The US's actions could set a precedent, encouraging other countries to adopt similar policies, which could destabilize global trade.

"What the US is doing now is not reform; it is abandoning the entire system it had created."

• The US's current strategy is not a reformative measure but a departure from the international trade norms it once established.

• Singapore is currently in the lowest base tier with a 10% tariff from the US, which might have limited immediate impact.
• The broader implications of the US's actions could be significant if other countries follow suit, potentially marginalizing smaller nations.
• A shift towards individual trade terms could lead to smaller countries like Singapore being sidelined in international trade.

"The US has placed Singapore in the lowest base tier with a tariff of 10%, so the direct impact on us may be limited for now, but there are wider and more profound consequences."

• While the immediate impact on Singapore is minimal, the long-term consequences of global trade shifts could be severe.

• Other countries are expected to respond strongly to the US's tariff policies, which could lead to increased global trade tensions.
• The abandonment of the WTO framework by multiple countries could disrupt international trade, creating instability and uncertainty.
• The new trade approach could particularly disadvantage smaller nations, which rely on established trade rules for protection and fairness.

"If other countries adopt the same approach as the US, abandoning the WTO and trading only on their own preferred terms country by country, it will spell trouble for all nations, especially small ones like Singapore."

• A shift towards country-specific trade terms could destabilize global trade, with smaller nations facing the risk of being marginalized.

• The possibility of a global trade war is increasing, driven by higher tariffs and uncertain international responses.
• Such a trade war could severely impact international trade, investments, and global economic growth.
• Singapore is particularly vulnerable due to its significant dependence on trade.

"The likelihood of a full-blown global trade war is growing. The impact of the higher tariffs plus the uncertainty of what other countries may do next will weigh heavily on the global economy."

• This quote highlights the growing risk of a trade war and its potential to negatively affect the global economy due to increased tariffs and unpredictable international actions.

• The current situation is compared to the 1930s, where trade wars escalated into armed conflict leading to World War II.
• There is uncertainty about how the current tensions will evolve, but the potential dangers are significant.

"The last time the world experienced something like this was in the 1930s. Trade wars escalated into armed conflict and eventually the Second World War."

• This statement draws a parallel between the current trade tensions and historical events, emphasizing the severe consequences that can arise from escalating trade conflicts.

• Global institutions are becoming less effective, and international norms are deteriorating.
• More countries are likely to act unilaterally, disregarding established international frameworks and agreements.

"Global institutions are getting weaker, international norms are eroding, more and more countries will act based on national interests."

• The quote underscores the decline in the effectiveness of global institutions and the erosion of international norms, leading to increased unilateral actions by countries.

• The current global environment is characterized by instability and unpredictability, with countries prioritizing self-interest and using force to achieve their objectives.
• Singapore is actively preparing for these challenges by enhancing its capabilities and strengthening partnerships with like-minded nations.
• The country is well-prepared with reserves, cohesion, and resolve, but acknowledges the need for continued vigilance and readiness for future shocks.
• The speaker emphasizes the importance of mental preparedness among citizens to avoid being caught off guard by global changes.

"The global calm and stability we once knew will not return anytime soon."

• This quote highlights the speaker's view on the long-term nature of current global instability and the improbability of a return to previous levels of international calm and stability.

"We will stay vigilant; we will build up our capabilities; we will strengthen our network of partnerships with like-minded countries."

• This statement outlines the proactive measures Singapore is taking to address global instability, emphasizing vigilance, capability enhancement, and international partnerships.

"We are more ready than many other countries with our reserves, our cohesion, and our resolve."

• The speaker expresses confidence in Singapore's preparedness compared to other nations, citing the country's resources, unity, and determination as key strengths.

• Citizens are urged to be mentally prepared for the challenges posed by a changing global landscape.
• There is a call to avoid complacency and recognize the real risks and high stakes involved.
• The speaker stresses the need for a united and resolute approach to ensure Singapore's continued success and security.

"I am sharing this with you so that we can all be mentally prepared, so that we will not be caught off guard."

• This quote underscores the speaker's intention to inform and prepare citizens for potential global challenges, emphasizing the importance of awareness and readiness.

"Let us not be lulled into complacency; the risks are real, and the stakes are high."

• The speaker warns against complacency, highlighting the genuine risks and significant consequences associated with global instability.

"The road ahead will be harder, but if we stay resolute and united, Singapore will continue to hold its own in this troubled world."

• The speaker concludes with a message of resilience and unity, suggesting that despite future difficulties, Singapore can maintain its position through collective determination and solidarity.