Amid the current climate of geopolitical uncertainty, Mr Wong said that the world has changed, “and it’s not changing back anytime soon”.
“This is not just about what one country does. The fact is, trade barriers are going up and the rules keep shifting. The tensions between the major powers, especially America and China, are heating up and will continue to do so.” he said.
Tariffs between the two powers remain sky-high, he said, noting that even China-built ships heading to the US are being taxed.
“America is also targeting other regional countries they think are bypassing their rules,” he said, referring to how solar panels from several Southeast Asian countries have been slapped with tariffs as high as 3,500 per cent.
Mr Wong said this “new storm” will be similar to the COVID-19 pandemic, though “no one can tell” how long it might last.
“But it’s not going to be a one-year affair, so we have to be mentally prepared for the longer term,” he said.
The uncertainties will add to the challenges Singapore faces today, Mr Wong said, pointing to cost-of-living pressures as one example.
“Cost pressures is a problem that started earlier because of global inflation – due to conflicts abroad, due to global supply chain disruptions,” he said.
“Inflation everywhere has started to ease … But these recent global developments may cause further disruptions and may cause further price shocks.”
Jobs will also be impacted, Mr Wong said, adding that he knows many people are worried about this.
To deal with this, a “comprehensive package” of measures was unveiled in this year’s Budget, he said.
These include measures to ease cost-of-living concerns for households, uplift workers’ wages and boost their skills, and restructure and transform businesses to help them stay competitive.
RAYS OF LIGHT IN THE STORM
While the challenges ahead may be immense, it is not all doom and gloom, said Mr Wong.
“Even in the darkest of storms, there are rays of light – new opportunities for those who are prepared. And I want to make sure that every worker in Singapore is prepared,” he said.
Listing the opportunities ahead, Mr Wong said that the Asian growth story continues to unfold and many countries in Asia, including parts of the Middle East, are among the fastest-growing economies today.
There is also potential in emerging regions like Latin America and Africa, although ties with countries there are limited due to the geographical distance.
But Singapore’s brand is known and respected, and more can be done to link up for mutual benefit, he said.
“So while others see risks, we are always on the lookout for new openings and opportunities,” said Mr Wong.
The Singapore government on Apr 16 formed a task force helmed by Deputy Prime Minister Gan Kim Yong and four other ministers to help businesses and workers deal with the effects of sweeping US tariffs.
This came just two weeks after US President Donald Trump slapped a baseline 10 per cent tariff on all imports targeting countries around the world, including Singapore. Higher “reciprocal tariffs” were imposed on dozens of America’s trading partners, with China bearing the brunt of the levies.
Trump later said there would be a 90-day pause on the higher tariffs, but doubled down on China, prompting a series of tit-for-tat tariff hikes between the two largest economies in the world.
US import duties on Chinese products are now as high as 145 per cent, while China has imposed 125 per cent tariffs on US products.
The task force will come up with measures for short-term support and develop additional measures if needed, as well as come up with long-term strategies to transform businesses and workers.
Mr Wong said that he has met many CEOs of multi-national companies in recent months, and they see the potential in Asia. They want to diversify their presence and are keen to do more here in Singapore.
“They see Singapore as a reliable and a pro-business hub – secure, stable, and trusted. So let’s keep this going for as long as we can, that is our competitive advantage,” he said.
Besides attracting new investments, the government will help Singapore companies restructure and transform, he said. There are many government schemes that they can tap on to help them transform, improve productivity, and expand overseas, he added.
Mr Wong said that Singapore should protect tripartism, which is unique to Singapore.
