Singapore’s S$4B Pharma Exports at Risk Amid New US Tariffs: Hope Hinges on Ongoing Trade Talks

SINGAPORE, Sept 27 — A fresh wave of uncertainty has hit Singapore’s pharmaceutical sector as the United States threatens to impose steep 100 per cent tariffs on branded drug imports — a move that could impact up to S$4 billion (RM13 billion) worth of exports annually.

Deputy Prime Minister Gan Kim Yong, who also serves as Singapore’s Minister for Trade and Industry, acknowledged growing concern among pharmaceutical companies operating in the country. Many of these firms are now urgently seeking clarity on whether they may be granted exemptions from the punitive tariffs.

“The majority of our pharmaceutical exports to the US are branded drugs,” Gan told reporters. “This is a significant concern, as pharmaceuticals account for roughly 13 per cent of our total exports to the US.”

The tariff bombshell was dropped by former US President Donald Trump on Thursday, declaring a 100% duty on imported branded drugs, unless the companies establish manufacturing bases within the United States — part of a wider push to “bring jobs home.”

While the implications are worrying, there may be a silver lining. According to Gan, many pharmaceutical companies in Singapore already have ongoing or planned expansions in the US, which could potentially qualify them for exemptions.

Gan’s recent meeting with US Commerce Secretary Howard Lutnick in August laid the groundwork for ongoing bilateral trade negotiations, particularly in the pharmaceutical and semiconductor sectors.

“Ultimately, we hope to arrive at an arrangement that allows Singaporean companies to stay competitive in the US market,” said Gan. “While the exact tariff rates — whether 15 per cent or more — are still part of the negotiations, we’re pushing for preferential treatment to soften the blow of the current tariffs.”

Despite the US-Singapore Free Trade Agreement (FTA) being in place since 2004, Singapore’s exports to the US are already subject to a baseline tariff of 10%, raising further concerns. With the US central bank warning that about 40% of Singapore’s exports to the US consist of semiconductors, consumer electronics, and pharmaceutical goods, the risk of broader sectoral impact is very real.

In fact, data shows that the effective US tariff rate on Singapore’s exports has already climbed to 7.8% in July, up from 6.8% in April, largely due to hikes in tariffs on steel and aluminium.