Singapore must be clear-eyed about the dangers ahead, as global institutions get weaker and international norms erode, said Prime Minister Lawrence Wong on April 4.
Touching on the recent news about the decision by the US to impose tariffs on many countries including Singapore, PM Wong said that the Republic must brace itself for more shocks to come.
"We must be clear-eyed about the dangers that are building up in the world. Global institutions are getting weaker; international norms are eroding," he said in a five-minute video uploaded to his social media accounts.
"More and more countries will act based on narrow self-interest, and use force or pressure to get their way. This is the harsh reality of our world today."
On April 2, US President Donald Trump announced a decision to impose a 10 per cent tariff on most goods imported into the US from Singapore and key partners, with higher duties for many other countries.
Describing the announcement as a "seismic change in the global order", PM Wong stressed how with the move, the era of rules-based globalisation and free trade is over.
The world is entering a new phase - one that is more arbitrary, protectionist and dangerous, he noted.
"For decades, the US was the bedrock for the free market economies of the world. It championed free trade, and led efforts to build a multilateral trading system, anchored by clear rules and norms, where countries could achieve win-win benefits through trade," he said.
"This World Trade Organisation (WTO) system brought unprecedented stability and prosperity to the world - and to the US itself."
This system is not perfect, acknowledged PM Wong, adding that Singapore, and many others, have long called for reform to update the rules and to make the system better.
"But what the US is doing now is not reform. It is abandoning the entire system it had created. Its new approach of reciprocal tariffs, country by country, is a complete rejection of the WTO framework," he pointed out.
The new 10 per cent tariff placed on Singapore, which the US has grouped in the lowest base tier, may have a limited direct impact "for now", but PM Wong warned that the broader implications are serious - especially if more countries follow the US in turning away from the WTO and choosing to trade "only on their own preferred terms, country by country".
"If other countries adopt the same approach... it will spell trouble for all nations, especially small ones like Singapore," he said. "We risk being squeezed out, marginalised and left behind."
A strong global response to America's tariffs is expected, said PM Wong. While Singapore has decided to not impose retaliatory tariffs, he warned that other countries may not exercise the same restraint.
This, he said, raises the likelihood of a full-blown global trade war, with the uncertainty of what countries may do next weighing heavily on trade, investment and growth.
"International trade and investments will suffer, and global growth will slow. Singapore will take a bigger hit than others, because of our heavy reliance on trade," said PM Wong.
On April 3, Deputy Prime Minister Gan Kim Yong said that Singapore is reassessing its 2025 growth forecast, and is prepared to provide support for households and businesses if the situation deteriorates.
DPM Gan, who is also Minister for Trade and Industry, had noted that the US and Singapore have a longstanding economic relationship and an existing Free Trade Agreement, and that the Government will engage Washington to clarify the rationale behind the tariffs.
PM Wong recalled how the last time the world experienced something like this was in the 1930s, noting how trade wars then escalated into armed conflict and ultimately World War II.
"No one can say how the current situation will unfold in the coming months or years. But we must be clear-eyed about the dangers that are building up in the world," said PM Wong.
The "harsh reality" of the world today is that global institutions are getting weaker, and international norms are eroding, said PM Wong. He underscored how more and more countries will act based on narrow self-interest, and use force or pressure to get their way.
Amid the uncertainty, Singapore will stay vigilant, build up its capabilities, and strengthen its network of partnerships with like-minded countries. "We are more ready than many other countries, with our reserves, our cohesion, and our resolve. But we must brace ourselves for more shocks to come," he said.
"The global calm and stability we once knew will not return anytime soon. We cannot expect that the rules which protected small states will still hold.
"I am sharing this with you so that we can all be mentally prepared. So that we will not be caught off guard. Let us not be lulled into complacency. The risks are real. The stakes are high."
He acknowledged that the road ahead will be harder, and called on Singaporeans to stay resolute and united.
"If we stay resolute and united, Singapore will continue to hold its own in this troubled world," he said.
