Singapore Negotiates with US on Pharmaceuticals

Singapore is in talks with the United States to secure key concessions on pharmaceutical exports while maintaining access to critical AI semiconductor technologies, according to a statement from Trade and Deputy Prime Minister Gan Kim Yong. The negotiations come at a time when global trade tensions and export controls are increasingly shaping economic ties between major trading partners.

Gan spoke following a call with U.S. Secretary of Commerce Howard Lutnick on Friday, where concerns around export restrictions were raised. Per a statement released by Singapore’s trade ministry on Sunday, Lutnick expressed that he was worried about chip export controls “not just to Singapore, but generally” and emphasized the need for “creative solutions” to enhance bilateral trade.

During the discussion, Gan explained Singapore’s approach to managing sensitive exports. “We took the opportunity to explain to Secretary Lutnick about Singapore’s export control system and how we have been working together with the U.S. counterparts in this area, to the extent that our law permits,” Gan said, according to the official transcript. He also reaffirmed that Singapore does not support companies exploiting its jurisdiction to bypass U.S. export restrictions.

Pharmaceutical products, which form more than 10% of Singapore’s exports to the U.S., have come under scrutiny as well. President Donald Trump had previously threatened to impose tariffs on pharmaceuticals, prompting Singapore to push for protective measures. According to a statement from Gan, gaining concessions on this front remains a top priority as the city-state navigates potential trade headwinds.

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“I think these two areas are very important and it is something that we are very happy to see there is progress being made in our discussion between Singapore and the U.S.,” Gan said, while emphasizing that an agreement has not yet been finalized.

Trade relations between the two countries have faced complications recently. Singapore, despite having a bilateral free trade agreement with the U.S., is subject to a 10% levy on some goods—significantly lower than tariffs faced by regional peers, but still a burden for the trade-dependent economy. In February, Singaporean authorities charged three individuals with fraud involving the unauthorized shipment of servers, potentially containing U.S.-origin Nvidia chips, to Malaysia, highlighting the sensitivity around technology exports.

Economic challenges at home are adding pressure to Singapore’s position. The government recently downgraded its 2025 GDP growth forecast to a range of 0% to 2%, following a 0.8% contraction in the first quarter. Per a statement from government officials, the risk of recession and job losses is growing amid global uncertainties.

These negotiations take place against a politically charged backdrop, as Singapore heads into a general election on May 3.

Source: Reuters