Singapore’s STI Soars as Trump Pauses Tariffs

The Singapore Stock Market Index (STI) surged more than 8% on Monday, April 10, 2025, as the market reacted to President Trump’s decision to pause the implementation of new tariffs. This pause, which came as a surprise to many, provided a much-needed reprieve for Singapore’s export-dependent economy, which had been bracing for the impact of the 10% tariffs on its exports to the United States.

The STI’s rally was a stark contrast to its recent performance, which had seen it plummet 203 points, or 5.2%, to 3,623, touching its lowest in four months. The market had been retreating for the sixth consecutive session, with almost all sectors trading in the red. The producer manufacturing and retail trade sectors had been particularly hard hit, plunging by 13.4% and 10.4%, respectively. The STI had also decreased 254 points or 6.71% since the beginning of 2025, according to trading on a contract for difference (CFD) that tracks this benchmark index from Singapore.

The pause on tariffs by President Trump has a significant impact on Singapore's STI and the broader Singaporean economy. On April 2, 2025, President Trump announced a 25% duty on automotive imports and reactivated tariffs on steel and aluminum. These measures, part of what the administration termed "Liberation Day," aimed to address perceived trade imbalances. The tariffs were expected to affect numerous countries, including major economies such as China, the European Union, and Canada. Singapore, as a heavily trade-dependent nation, is especially vulnerable to global trade disruptions. The Ministry of Trade and Industry (MTI) has maintained its 2025 growth prediction of 1% to 3%, noting uncertainties arising from US trade policy and probable escalation in geopolitical crises. Despite the predicted slowdown, MTI Permanent Secretary Beh Swan Gin has stated that the labor market is solid, with vacancy rates, unemployment levels, and retrenchment data providing no immediate cause for alarm. However, the pause on tariffs by President Trump has provided a temporary reprieve, allowing Singapore to reassess its economic strategies and mitigate potential long-term effects.

The sectors within the STI that are likely to benefit the most from the pause on tariffs are those that are heavily dependent on exports and international trade. These sectors include manufacturing, wholesale trade, and transport. These sectors are particularly vulnerable to global trade disruptions and have been significantly impacted by the recent imposition of tariffs by the United States.

For instance, the manufacturing sector, which experienced a 7.4% year-on-year growth in the fourth quarter of 2024, is likely to benefit from the pause on tariffs as it would reduce the friction in trade and allow companies to adapt to shifts in supply and demand. Similarly, the wholesale trade and transport sectors, which are outward-oriented, would also benefit from the pause on tariffs as it would help to mitigate the adverse effects on local businesses and workers.

Moreover, the pause on tariffs would also benefit sectors that are heavily reliant on imports, such as the retail trade sector. The retail trade sector, which plunged by 10.4% on April 10, 2025, is likely to benefit from the pause on tariffs as it would reduce the cost of imports and help to boost consumer spending.

The pause on tariffs by President Trump has provided a temporary reprieve for Singapore’s economy, allowing it to reassess its economic strategies and mitigate potential long-term effects. However, the global economic environment remains uncertain, with rising geopolitical tensions and inflationary pressures. Singapore’s government has been proactive in its response, activating several support measures outlined in Budget 2025, including short-term relief schemes such as CDC and SG60 vouchers, U-Save rebates, and enhanced ComCare Assistance for vulnerable groups. The government has also formed a new taskforce led by Deputy Prime Minister Gan Kim Yong to help businesses and workers adapt to the changing economic landscape.

The pause on tariffs by President Trump has provided a temporary reprieve for Singapore’s economy, allowing it to reassess its economic strategies and mitigate potential long-term effects. However, the global economic environment remains uncertain, with rising geopolitical tensions and inflationary pressures. Singapore’s government has been proactive in its response, activating several support measures outlined in Budget 2025, including short-term relief schemes such as CDC and SG60 vouchers, U-Save rebates, and enhanced ComCare Assistance for vulnerable groups. The government has also formed a new taskforce led by Deputy Prime Minister Gan Kim Yong to help businesses and workers adapt to the changing economic landscape.

In conclusion, the pause on tariffs by President Trump has provided a temporary reprieve for Singapore’s economy, allowing it to reassess its economic strategies and mitigate potential long-term effects. However, the global economic environment remains uncertain, with rising geopolitical tensions and inflationary pressures. Singapore’s government has been proactive in its response, activating several support measures outlined in Budget 2025, including short-term relief schemes such as CDC and SG60 vouchers, U-Save rebates, and enhanced ComCare Assistance for vulnerable groups. The government has also formed a new taskforce led by Deputy Prime Minister Gan Kim Yong to help businesses and workers adapt to the changing economic landscape. The sectors within the STI that are likely to benefit the most from the pause on tariffs are those that are heavily dependent on exports and international trade, as well as those that are heavily reliant on imports. These sectors are likely to benefit from the reduced friction in trade and the boost in consumer spending that would result from the pause on tariffs.