SINGAPORE: Singapore has downgraded its gross domestic product (GDP) growth forecast for 2025 to 0 per cent to 2 per cent, the Ministry of Trade and Industry (MTI) said on Monday (Apr 14), citing the impact of US President Donald Trump's tariffs on global trade.

The ministry noted that in February, Singapore’s GDP growth forecast for the year was at 1 per cent to 3 per cent. This took into account an expected easing in the overall growth of Singapore’s key trading partners, including the US and China.

"Since then, the US has imposed a baseline tariff of 10 per cent on all countries and higher reciprocal tariffs targeted at countries that run large trade surpluses with the US," said MTI. 

It added that the tariffs imposed by Trump and the ongoing trade war between the US and China are expected to "weigh significantly on global trade and global economic growth".

The growth outlook of economies in the region will be "negatively affected" by a fall in external demand partly due to the tariffs’ wider impact on global trade and growth.

"Business and consumer sentiments will also be dampened, thereby crimping domestic consumption and investments in many economies," said MTI.

Singapore's economy grew 3.8 per cent in the first quarter of 2025 compared with the same period a year ago, according to advance estimates from the ministry.

The tariffs, announced by Trump on Apr 2, impose a universal 10 per cent tariff on all imports into the country, with higher rates for countries deemed to have treated the US "unfairly".

Trump on Apr 9 hit the pause button on imposing higher levies on its trading partners - except China - for 90 days, but Singapore, which currently imposes zero tariffs on US imports, is still subject to the baseline 10 per cent rate.

While Singapore “may or may not” slip into recession this year, the economy will be significantly impacted, Prime Minister Lawrence Wong said on Apr 8.

“Slower growth will mean fewer job opportunities and smaller wage increases for workers. And if more companies face difficulties or relocate their operations back to the US, there will be higher retrenchments and job losses,” he added.

Beyond immediate concerns, Mr Wong said the tariffs confirm the stark reality that “the era of rules-based globalisation and free trade is over”.

Singapore will form a national task force to support businesses and workers in response to the tariffs which could slow economic growth, and impact jobs and wages, he said.

The task force, chaired by Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong, will include representatives from Singapore's economic agencies, the Singapore Business Federation, the Singapore National Employers Federation and the National Trades Union Congress.