US tariffs: Will the support from the Government and unions be enough to help workers navigate uncertainty?

It’s clear by now that the US tariffs will impact countries worldwide, including Singapore.

On 2 April 2025, the US announced it would impose sweeping tariffs on imported goods. This move reflects America’s attempt to reduce its trade deficits and shift toward what President Donald Trump calls “fair” rather than “free” trade, aiming to bolster its wealth.

Even as the US’ key trading partner, Singapore has not been spared. Despite the US-Singapore Free Trade Agreement (FTA), which has been in effect since 2004, the trade-dependent city-state faces a baseline tariff of 10 per cent. Under this agreement, Singapore applies zero tariffs on US products, provided they qualify as originating goods.

The baseline 10 per cent tariffstook effect on 5 April 2025.

Before you think the tariffs have nothing to do with you, think again.

How will the tariffs affect the average Singapore worker?

The average Singapore worker relies on their employer’s profitability to retain their job. But what happens when firms earn less or struggle to grow at a normal pace?

According to the Department of Statistics Singapore, the city-state exported goods valued at $51.1 billion to the US in 2023, making America one of its largest trading partners. 

However, as Singapore Management University (SMU) Professor of Economics Hoon Hian Teck points out, the 10 per cent tariffs will make Singaporean goods more expensive for US consumers.

“As these items become more expensive to purchase, American customers will reduce the quantity they buy from us, thus hurting our export sales,” he explained.

“This hurts the profitability of Singapore-based firms, which could lead to retrenchments,” he warned.

He added that the uncertainty surrounding the outcome of the US tariff rates after the 90-day pause could delay investment plans.

“The slower pace of global economic growth also acts to hurt the profitability of Singapore-based firms even if they do not export directly to the US. This could also adversely affect our wage earnings and employment prospects,” he explained.

Professor Hoon added that slower growth and business uncertainty could dampen hiring demand.

“Since firms incur firm-specific training costs when they hire new employees to orientate them to the workings of their workplace, the increased uncertainty might make them delay plans to hire new employees. 

“This would worsen job market prospects for new entrants to the job market and employed workers thinking of making a switch in their careers,” he cautioned.

How will workers be protected against the tariff fallout?

At the national level, Singapore has established the Singapore Economic Resilience Taskforce (SERT) to help firms and workers navigate uncertainties. The taskforce includes representatives from the Government, businesses, and the Labour Movement. It focuses on regular communication, addressing immediate challenges, and developing strategies to adapt to a changed world.

National programmes, such as the SkillsFuture Jobseeker Scheme, offer support for displaced workers, such as up to $6,000 over six months for those transitioning to new jobs.  

National initiatives for mid-career individuals include the SkillsFuture Mid-Career Level-Up Programme, which provides course fee subsidies of up to 90 per cent and training allowances of up to $3,000 a month for 24 months.

Can unions provide more support for workers?

Meanwhile, Singapore’s unions are proactively supporting workers in navigating potential challenges ahead.

Professor Hoon predicts that companies in the electronics sector will likely be hit hardest, a sentiment echoed by United Workers of Electronics and Electrical Industries (UWEEI).

To protect workers, UWEEI Executive Secretary Patrick Tay shared that the union is planning to ramp up the implementation of NTUC Company Training Committee (CTC) Grant transformation projects in the industry to enhance skills and employability and thereby strengthen job security.

The union represents over 65,000 members across more than 120 companies.

The United Workers of Electronics and Electrical Industries (UWEEI) union leaders and NTUC Secretary-General Ng Chee Meng (top row, fifth from right) at a visit to UWEEI branch Murata Singapore on 6 February 2025.

The Labour Movement initiated the Company Training Committees in 2019 to bring together union leaders and management representatives in planning and implementing training programmes to upskill workers for new jobs and provide career progression. The Grant was introduced in 2022 to support firms in pursuing their transformation plans.

Over 3,000 CTCs have been formed to date, leading to more than 400 transformation projects that have improved wages and career prospects for over 7,400 workers.

An additional $200 million in Government funding for CTC Grant projects will help ensure that more workers have better salaries and job prospects during this challenging period.

UWEEI noted that trade tensions are affecting direct exports to America and components routed to countries like China, Vietnam, and Thailand for assembly before shipping to the States.

Mr Tay pointed out that the “compounded impact of tariffs on these countries may lead to a decline in orders for Singapore-based manufacturers.”

While UWEEI has not yet observed job losses, it expects muted hiring in the coming months.

In addition to increasing CTC Grant projects, Mr Tay said the union will encourage its unionised companies to adopt the Operation and Technology Roadmap to ensure the continued provision of quality jobs.

The OTR helps SMEs and MNCs visualise how their businesses can grow, allowing workers to transform by leveraging the right drivers, products, services, and technologies.

The petroleum sector also faces challenges due to trade uncertainty.

The United Workers of Petroleum Industry (UWPI) General Secretary Muhammad Aswadi Salleh indicated that firms in the industry may cut jobs to maintain production costs and profit margins.

With lower demand for energy products, companies may reassess their business models, leading to reduced production and fewer jobs.

To complement the union’s plan to roll out more transformation projects, Mr Aswadi added that UWPI will continue collaborating with its 41 organised companies to upskill the petroleum workforce for future jobs. It currently represents around 5,000 petroleum workers.

Trump’s trade policies could also impact workers in the advanced manufacturing sector.

“Machinery and metal component companies are holding a more cautious outlook as the global demand could be disrupted,” said Advanced Manufacturing Employees’ Union (AMEU) Executive Secretary Teo Siew Pan.

“Some companies are exploring to divert some of the production orders from higher tariff countries, like Thailand and Vietnam, to Singapore,” she added.

The union represents nearly 24,000 workers from over 90 companies.

Due to weakened global demand, Ms Teo explained that several international firms may introduce cost-cutting measures, including hiring freezes, headcount reviews, shorter workweeks, and lower wage increases and bonuses.

In addition to ensuring compliance with benefits outlined in Collective Agreements, AMEU will urge companies to adopt a long-term perspective on manpower planning, emphasising that “retrenchment should be the last resort.”

“If companies are embarking on cost reduction, we will negotiate with the company to ensure that the management reduces non-manpower related costs first. And if that is not sufficient, senior management staff should take the lead with higher or deeper wage cuts.

“If the company needs to adjust work schedules or implement shorter workweeks due to lower production, we will negotiate for cost-sharing so that workers do not bear the full impact of cost reduction,” Ms Teo added.

Want more protection amid global uncertainties? Join us as an NTUC member and let your union support you in navigating tough times ahead.