Deputy PM Gan seeks balance as US tightens chip controls and threatens pharmaceutical tariffs
Singapore is in high-stakes talks with the United States to secure concessions on pharmaceutical exports and maintain access to advanced AI chips amid rising US trade restrictions and a weakening economic outlook.
Singapore Pushes Back on US Export Pressures
Trade and Deputy Prime Minister Gan Kim Yong revealed on April 28 that Singapore is negotiating with the US for key trade concessions amid tightening American controls on artificial intelligence chip exports. Following a call with US Secretary of Commerce Howard Lutnick, Gan said discussions are focused on “creative solutions” to preserve bilateral trade ties while addressing Washington’s national security concerns.
The US has been ramping up restrictions on advanced semiconductor exports to countries seen as potential security risks. Although not a direct target, Singapore is caught in the policy spillover. Gan assured that Singapore enforces strict export controls and does not permit its jurisdiction to be misused for bypassing US sanctions. The issue gained renewed attention after Singapore charged three men in February for allegedly redirecting server components containing Nvidia chips to Malaysia.
Pharmaceuticals Face Tariff Threat
Singapore’s pharmaceutical industry, which contributes over 10% of its exports to the US, is also at risk. Former US President Donald Trump previously threatened tariffs on pharmaceutical products—a policy that could resurface. Gan emphasized the importance of seeking exemptions or concessions in this area, especially with existing supply chain integrations and Singapore’s strategic pharmaceutical capabilities.
Bilateral Agreement Under Strain
Despite a bilateral Free Trade Agreement (FTA), Singapore currently faces a 10% levy from the US, significantly lower than regional peers but still a burden. These conditions add friction to a trade-reliant economy that is highly exposed to global demand cycles. Gan acknowledged progress in talks but noted that no agreement has been finalized.
Adding to the urgency, Singapore has downgraded its 2025 GDP growth forecast to 0–2% following a 0.8% quarter-on-quarter contraction in Q1. The trade headwinds and external risks come just days ahead of the May 3 general election, where cost of living issues dominate the national conversation. The government is walking a tightrope—balancing diplomatic relations, economic growth, and domestic pressure.
Regional Repercussions and Digital Future
With Southeast Asia increasingly interconnected through digital trade and semiconductor supply chains, Singapore’s success or failure in these negotiations could ripple across the region. Gan reaffirmed the nation’s digital ambitions and its role in AI innovation, stressing the need for stable, fair access to critical technologies and export markets.
Singapore’s careful diplomacy in the face of rising US protectionism is not just about chip access or pharmaceutical margins—it represents a broader effort to safeguard national resilience amid global uncertainty. Its outcomes will likely shape digital strategies, trade policy, and investor confidence across the region, including key partners like Indonesia navigating similar vulnerabilities.
Sources: Malay Mail (2025), Reuters (2025)
Keywords: Singapore AI Chips, US Export Controls, Pharmaceutical Tariffs, Gan Kim Yong, Trade Negotiations
