US tariffs Singapore: rate rises to 15% as firms warn uncertainty is the bigger hit

Singapore exporters are preparing for a higher US tariff after President Donald Trump announced a 15% levy on goods entering the United States. Singapore is the only South-east Asian economy facing a rise in its US tariff rate, from 10% to 15%, according to business and trade feedback reported in Singapore.

Analysts and industry groups said the direct impact on Singapore’s exports should stay manageable in the near term. Key semiconductor and pharmaceutical exports remain exempt from the new surcharge, based on current guidance.

A court ruling set off a fast policy pivot

The tariff shift followed a US Supreme Court ruling on Feb 20 that struck down “reciprocal tariffs” imposed under the International Emergency Economic Powers Act, or IEEPA. IEEPA is a US law that gives the president certain powers during declared emergencies, but the court found it did not support broad tariff action in this form.

Hours later, the White House turned to a different legal tool. It issued a proclamation invoking Section 122 of the Trade Act of 1974 to impose a temporary import surcharge. Section 122 allows a short-term tariff response to serious balance-of-payments problems, capped at 15% and limited to 150 days unless Congress approves an extension.

The proclamation first set a 10% surcharge, then the administration raised it to 15%. The White House said the measure takes effect from Feb 24, 12.01am.

What changes for Singapore exporters

A higher headline tariff raises the cost of Singapore-origin goods for US importers. In practice, the near-term effect depends on product mix and contract terms. Priyanka Kishore of consultancy Asia Decoded said the overall impact “should be manageable” because semiconductors and pharmaceuticals remain exempt.

Some firms still expect pressure on pricing and timelines. EP-Tec Solutions, which exports LED display screens to the US, said a five-point increase can affect competitiveness and procurement decisions. The company said it is looking at diversifying markets and shifting some processes if the higher tariff persists.

SMEs expect indirect exposure first

Most small and medium-sized enterprises in Singapore do not export directly to the US. The Association of Small and Medium Enterprises said that limits the immediate impact on many SMEs. Still, its president, Ang Yuit, said rapid tariff changes have revived uncertainty for business planning.

The Singapore Business Federation made a similar point. Chief executive Kok Ping Soon said early feedback suggests uncertainty is hurting confidence more than the tariff rate itself. He said firms can plan around a known cost, but they struggle when rules change repeatedly.

Regional production shifts do not end the concern

Some Singapore-linked companies produce in other South-east Asian markets, which can change the tariff they face. Furniture firm Koda said most of its US-bound products are made in Vietnam. It said the general tariff on those exports would be 15% under the latest announcement. It also said certain product lines still face higher duties.

Even with that mix, Koda’s management said the bigger issue is policy unpredictability. It said tariff sharing with US retailers has evolved over time as customers price duties into new products. However, further US changes could disrupt planning again.

Refunds and enforcement questions move to the forefront

The legal reset has also raised questions about refunds tied to tariffs collected under IEEPA. US Customs and Border Protection is expected to stop collecting the IEEPA-based tariffs from the same Feb 24 start time for the new regime, following the court ruling.

Singapore’s manufacturing and trade groups said exporters may not benefit from any refunds even if they happen. US importers pay tariffs at the border, so any reimbursement would typically go to them. Firms also said it can be difficult to prove how costs were shared through discounts.

Singapore seeks clarity before the new rate bites

Deputy Prime Minister Gan Kim Yong said Singapore will engage US counterparts to clarify how the new 15% tariff will be implemented. The Ministry of Trade and Industry is also seeking details on any refund process.

For now, companies are weighing a clear new headline rate against a moving policy landscape. The tariff increase matters, but many businesses say the larger risk lies in uncertainty that delays investment, reroutes supply chains and complicates long-term decisions.