US tariffs threaten $3.1 billion of Singapore’s pharma exports

Pharmaceutical companies in Singapore are seeking clarification on whether they would qualify for an exemption from steep tariffs imposed by the United States on their goods, Singapore’s Deputy Prime Minister Gan Kim Yong said on Saturday.

Singapore exports about S$4 billion ($3.10 billion) of pharmaceutical products to the US and most of these exports are branded drugs, Gan, who is also trade minister, told reporters.

US President Donald Trump announced on Thursday 100% duties on imports of branded drugs that would apply to firms unless they build a manufacturing presence in the US

This is a concern for Singapore as pharmaceuticals form around 13% of all Singapore exports to the US, said Gan.

He said that many of the pharmaceutical firms in Singapore have existing plans to expand or build their business footprint in the US, which may qualify them for a tariff exemption.

Gan, who met US Commerce Secretary Howard Lutnick in August, said trade talks with the US are ongoing, with officials on both sides working on details of possible deals for the pharmaceutical and semiconductor sectors.

“Ultimately, we hope to be able to have an arrangement with the US to allow us to continue to be competitive in the US market, to allow our pharmaceutical companies to be able to continue to export to the US market. As to whether the tariff rate will be 15% or any other tariff is something that is part and parcel of the negotiation, but we do look forward to having some preferential treatment versus the current top-line tariff the US has imposed,” said Gan.

Singapore’s exports to the US are subject to a 10% baseline tariff despite a free trade agreement in place with the island nation since 2004. Broader sectoral tariffs could hurt demand for Singaporean products, including semiconductors, consumer electronics and pharmaceutical goods, which the central bank in July said account for about 40% of exports to the United States.

The effective US tariff rate on Singapore’s exports rose to 7.8% in July from 6.8% in April on the back of steel and aluminium tariff hikes.

South Korea cannot pay $350b: South Korea is unable to pay $350 billion upfront in investment in the United States as President Donald Trump suggested under a deal to cut tariffs and is seeking an alternative solution, Seoul’s presidential adviser said on Saturday.

Since a handshake deal by the allies’ leaders in July to lower US tariffs to 15% from 25%, as Trump earlier imposed, South Korea has said the $350 billion in investment would be in the form of loans and loan guarantees as well as equity.

Trump in remarks this week said South Korea would provide the investment “upfront”, despite Seoul’s contention that kind of outlay could plunge Asia’s fourth largest economy into a financial crisis.

“The position we’re talking about is not a negotiating tactic, but rather, it is objectively and realistically not a level we are able to handle,” South Korea’s National Security Adviser Wi Sung-lac said on Channel A News television.

“We are not able to pay $350 billion in cash,” he said.

South Korea, which pledged $350 billion toward US projects in July, has balked at US demands for control over the funds and South Korean officials say talks to formalise their trade deal are at a deadlock.

On Thursday, Trump touted the amount of money he said his sweeping tariffs are bringing into the United States, saying: “We have in Japan it’s $550 billion, South Korea’s $350 billion. That’s upfront.”

Last week South Korean President Lee Jae Myung told Reuters that without safeguards such as a currency swap, South Korea’s economy, with foreign exchange reserves of $410 billion, would plunge into a crisis if it were made to make a massive outlay.

Wi, the top security adviser to Lee, said nobody would question South Korea’s position on the feasibility of the amount if it were required as a cash payment upfront.

“We’re discussing alternatives,” he said, adding Seoul is targeting a summit of the Asia-Pacific Economic Cooperation (APEC) grouping hosted by South Korea next month, which Trump is expected to attend, to finalise the trade deal with Washington.

Separately, the British government will offer to pay more for medicines that it buys for the National Health Service, the Financial Times reported on Friday, hoping to defuse one of US President Donald Trump’s top complaints after he announced steep tariff increases on branded medication.

British Prime Minister Keir Starmer’s chief business adviser, Varun Chandra, will travel to Washington next week, the report added.

Reuters could not immediately verify the report. The president has fumed because prescription drugs cost more in the US than in any other country, often by nearly threefold.

He has demanded that drug companies lower prices in the US and raise them elsewhere.

Reuters