SINGAPORE: About one-third of Singapore’s domestic exports to the United States are now subject to a new 12.5 per cent tariff aimed at rebuilding US President Donald Trump’s tariff regime after its legal basis was undermined by a court decision earlier in 2026.
Singapore’s Ministry of Trade and Industry (MTI) said the new tariff took effect at 12.01am Eastern Time on July 24.
A US Federal Register notice published on July 23 listed Singapore among dozens of economies facing duties of between 10 per cent and 12.5 per cent following an investigation by the Office of the US Trade Representative (USTR) into forced-labour concerns.
Announcing the new tariff, US Trade Representative Jamieson Greer said: “The United States has had a forced-labour import ban for nearly a century, and rigorously enforces it; it’s well past time for our trading partners to do the same.”
The USTR investigation, which began in March and concluded in July, placed Singapore among 45 economies that will face 12.5 per cent duties. The USTR said these economies had failed to adopt and effectively enforce prohibitions on trade in goods produced with forced labour.
Goods from about 10 trading partners deemed to have adopted forced-labour restrictions, including Mexico, Britain, Canada and India, will face 10 per cent tariffs.
Goods from Japan, Switzerland and South Korea will also be subject to 12.5 per cent tariffs, but in a manner that complies with the trade agreements they have reached with the US.
Singapore has rejected suggestions that it engages in unfair trade practices, including the use of forced labour in supply chains, and has told the US that it does not condone such practices.
On July 24, MTI said it would continue engaging the USTR to explore options on the matter. Further details on how the tariff would be implemented would also be announced in due course, it added.
“Singapore does not condone the use of forced labour and has a comprehensive enforcement framework and good track record against such illegal practices within our borders,” MTI said in a statement.
The ministry noted that forced labour in complex, multi-tiered international supply chains was a transnational issue requiring international cooperation and was most effectively addressed at source.
“Singapore is a major trading hub. As such, any trade restriction, including a prohibition on goods produced with forced labour, would need to be carefully considered, which we will continue to do in close consultation with the Singapore Economic Resilience Taskforce and the business community,” it said.
Foreign Minister Vivian Balakrishnan also told reporters on July 23, after concluding a week of meetings at the Asean Foreign Ministers’ Meeting in Manila, that he had raised the matter during a bilateral meeting with US Secretary of State Marco Rubio.
MTI said on July 24 that products subject to Section 232 tariffs — including primary metals such as steel, aluminium and copper, downstream derivative products and specific strategic goods such as cars, trucks and wood products — would be exempt from the new tariff.
Some exports would also remain exempt, including energy and energy products, pharmaceuticals and pharmaceutical ingredients, certain electronics, certain aerospace products, semiconductors and metals used in currency and bullion.
According to a presidential memorandum issued by the White House, goods already subject to Trump’s sector-specific tariffs and fertilisers would also be exempt, along with goods covered by the United States-Mexico-Canada Agreement.
The new tariff is part of a series of measures initiated to impose new and harsher duties after the US Supreme Court struck down in February the legal basis for Trump’s signature reciprocal tariffs imposed in 2025.
It replaces a 10 per cent global levy imposed under Section 122 immediately after the court’s decision. That levy expired earlier this week.
Singapore, along with 15 other economies, is also subject to USTR investigations under Section 301 into acts, policies and practices relating to structural excess capacity and production in manufacturing sectors.
It remains unclear when the findings of that investigation will be released or whether any future duties arising from it will be imposed on top of those proposed under the forced-labour investigation.
Last week, Greer said in a Bloomberg Television interview that the excess-capacity investigation was taking longer than the forced-labour probe because the USTR was trying to ensure that the measure complied with the letter of the law.
Experts believe the Trump administration is using Section 301 of the Trade Act of 1974 as the legal basis for imposing the new tariff on goods produced with forced labour because the law has no statutory expiration date or maximum percentage cap.
Historically, measures imposed under the law have also proven more resilient against judicial challenges.
However, using the statute as a basis for imposing blanket global or multilateral tariffs on dozens of countries stretches the law beyond Congress’ intent.
As a result, experts anticipate immediate lawsuits once the tariff takes effect.
Lennon Tan, president of the Singapore Manufacturing Federation, said on July 24 that the characterisation underpinning the tariff did not reflect the standards upheld by its members.
However, the impact on Singapore’s manufacturing companies would be real, he said.
“Our members face uncertainty over whether further duties may be layered on,” he said, referring to the ongoing excess-capacity investigation.
“We are surveying affected exporters, particularly those with significant US exposure, to quantify the impact and channel their concerns to the Government,” he said.
Tan added: “Manufacturers should continue diversifying markets, strengthening supply chain resilience and leveraging Singapore’s network of free trade agreements and the region’s growth to reduce their dependence on a single market.”
The Singapore Business Federation (SBF) said businesses in Singapore did not condone forced labour and supported efforts to uphold responsible and ethical supply chains.
“At the same time, any new regulatory requirements should be carefully studied and developed in close consultation with the industry, given the potential implications on business operations, supply chains, compliance costs and Singapore’s position as a trusted global trading and transhipment hub,” it said.
SBF chairman Mark Lee added: “Clear guidance and adequate transition periods will be essential to help businesses comply effectively.”
