Singapore rejects US forced labour claims as 12.5% tariff hits one-third of exports

Singapore has rejected the basis of a new US tariff linked to Washington’s findings on forced labour import prohibitions, while saying it will continue engaging American counterparts over the measure.

The Ministry of Trade and Industry (MTI) said on 24 July 2026 that about one-third of Singapore’s domestic exports to the US would be subjected to a 12.5 per cent tariff.

The new levy follows a determination by the Office of the United States Trade Representative (USTR) involving 60 economies, including Singapore, under Section 301 of the Trade Act of 1974.

The investigation examined acts, policies and practices relating to the failure to impose and effectively enforce a prohibition on imports of goods produced with forced labour.

The USTR concluded that all 60 economies under investigation had failed to impose a forced labour import prohibition, failed to effectively enforce such a prohibition, or both.

MTI said it would continue engaging the USTR to explore options on the matter, with further details on how the tariff would be implemented to be shared when ready.

Singapore rejects forced labour basis

MTI said forced labour undermines fair and open trade and stressed that Singapore does not condone the use of forced labour.

The ministry said Singapore has a comprehensive enforcement framework and a good track record in tackling such illegal practices within its borders.

It also said Singapore had consistently played a constructive role in advancing international labour standards to address forced labour.

Singapore ratified the International Labour Organization’s Forced Labour Convention, 1930 (C29), in October 1965.

MTI said forced labour within complex and multi-tiered international supply chains was a transnational issue requiring international cooperation and was most effectively addressed at source.

Singapore remains committed to upholding high labour standards globally and working with the international community, including the ILO, to develop measures addressing goods produced with forced labour, the ministry said.

The ministry also said that, as a major trading hub, Singapore needed to carefully consider any trade restriction, including prohibitions on goods produced with forced labour.

It said the government would continue considering such issues in close consultation with the Singapore Economic Resilience Taskforce and the business community.

Tariff affects about one-third of domestic exports

An MTI spokesperson said on Friday that about one-third of Singapore’s domestic exports to the US would be subjected to the 12.5 per cent tariff.

Goods already subject to the US' Section 232 national security tariffs, including steel and aluminium, are exempted.

MTI also identified several specific product exemptions covering energy and energy products, pharmaceuticals and pharmaceutical ingredients, certain electronics, certain aerospace products, semiconductors, and metals used in currency and bullion.

"There are also specific product exemptions such as for energy and energy products, pharmaceuticals and pharmaceutical ingredients, certain electronics, certain aerospace products, semiconductors, and metals used in currency and bullion," MTI said.

The tariff comes as US President Donald Trump's temporary 10 per cent worldwide tariffs expired on Friday at midnight US Eastern time, equivalent to noon Singapore time.

The latest measures are designed to be more resilient to legal challenges, according to officials.

Goods already subject to sector-specific tariffs, such as steel and aluminium, will not be affected.

A US official also told reporters that goods entering under the US-Mexico-Canada free trade pact would be exempt.

Balakrishnan says Singapore has no basis for tariffs

Foreign Affairs Minister Vivian Balakrishnan said on 23 July that Singapore had told the US it had "no technical or economic basis" for imposing tariffs on the country.

Dr Balakrishnan made the remarks after meeting US Secretary of State Marco Rubio on the sidelines of the 59th Association of Southeast Asian Nations (ASEAN) Foreign Ministers' Meeting.

"I made a point quite categorically that the US has a surplus, a trade surplus against us. In fact, it is growing," Dr Balakrishnan said.

He said the US administration, for its own domestic political reasons, needed to raise tariff revenue.

"Nevertheless, you know as well as I do that the American administration, for its own domestic political reasons, needs to raise tariff revenue," he said.

Dr Balakrishnan said he was trying to find a way to demonstrate to the US that Singapore was not its target.

"But we also need to make sure we don't become collateral damage in the overall scheme in which tariffs are going to be raised by the US with all its trading partners," he added.

Singapore faces separate USTR investigation

Singapore is also among 16 economies subject to a separate USTR investigation under Section 301.

That investigation concerns acts, policies and practices relating to structural excess capacity and production in manufacturing sectors.

The findings and proposed actions from that investigation have not been released.

The separate investigation adds another area of uncertainty for Singapore's trade relationship with the US, although no findings or proposed measures from that inquiry have yet been announced.

Business federation urges companies to assess exposure

The Singapore Business Federation (SBF) said on Friday that it would work closely with affected businesses to understand the impact of the tariffs and support them during the period.

The federation advised businesses to determine whether their exports were covered by the tariff or fell within the stated exclusions before assessing the potential impact.

It said companies with exposure to the US market should review product classifications and engage customers early.

Businesses should also assess possible implications for pricing, contracts and supply chains, according to the federation.

SBF chairman Mark Lee said clear guidance and adequate transition periods would be essential for businesses to comply effectively.

"Clear guidance and adequate transition periods will be essential to help businesses to comply effectively," Lee said.

The new tariff regime therefore leaves affected Singapore businesses assessing their individual exposure based on product classifications and the exemptions announced by US authorities.

MTI said it would provide further details on implementation when they were ready, while continuing discussions with the USTR over the issue.