On Saturday, September 27, Deputy Prime Minister of Singapore Gan Kim Yong stated that the proposed US pharmaceutical import tariffs would not immediately affect Singapore-based leading drugmakers, implying that most of them would be protected under the pretext of having a manufacturing presence in the US.
The remarks follow the announcement of new tariffs by former President Donald Trump, including pharmaceutical tariffs, which will take effect on October 1st.
But Trump suggested that companies putting up the manufacturing plants or even planning to put up in the US can be exempted.
Gan, the Minister of Trade and Industry, added that the government is negotiating with Washington to get more information.
He was cautiously optimistic and declared that pharmaceutical giants with operations in Singapore, such as Pfizer Inc., Amgen Inc., Merck and Co., Novartis AG, and AbbVie Inc., already have operational production capacity in the US. This may possibly entitle them to an exclusion.
Gan said that most pharmaceutical firms in Singapore have capacity in the US or intend to build. The companies themselves are also trying to figure out independently whether they may have an exemption.
Stakes are high in Singapore, which itself ships pharmaceuticals to the US at a rate of approximately 13 percent with a value of more than S$4 billion (3.1 billion) annually.
The industry produces blockbusters in the form of Cosentyx and Skyrizi to be used in international markets.
Although exceptions are possible, Barclays PLC economists have cautioned about the exposure of Singapore, and its post-implementation effect tariff would be second only to Vietnam, which is expected to have a 20 percent rate.
The city-state is also susceptible in terms of direct drug exports and shipments of intermediate goods.
Prime Minister Lawrence Wong had already condemned the US tariffs, saying that it is not something one does to a friend. Gan recognized the increased competition on investments, pointing out that Singapore will have to compete with numerous other countries, such as the US, in new investments.
The government remains concerned about ensuring clarity and reducing the long-term effects on its trade-dependent economy.
