DPM and Minister for Trade and Industry Gan Kim Yong:

I would like to give a statement and give an update on our discussion with the US. At the last Parliament sitting, I had to explain to Singaporeans about the negotiations that are ongoing, the discussion and consultation that have been ongoing between US and Singapore at different levels. I also promised to share with Singaporeans whenever we have some updates, but there is always some confidentiality with regard to negotiations. I would like to share as much as I can, again, within limits of confidentiality that I must observe, as negotiations are still ongoing.

I had a telephone call with US Secretary of Commerce Mr Howard W. Lutnick last Friday, and it was a very productive and constructive discussion between Singapore and the US. This has been arranged before, despite the election, I had to take the call because it is an important discussion between US and Singapore, and it was a very good discussion, I think.

I explained to Secretary Lutnick the nature of the bilateral trade and business between Singapore and US. He understood and emphasised that Singapore is a very important trading partner and economic partner, and he emphasised that he trusts Singapore, that is, US trusts Singapore.

He also emphasised that we are a friend, and therefore, he wants to see how we can further strengthen the bilateral relationship between US and Singapore. He also explained that the 10 percent baseline tariff is what he called an “umbrella”, which means it is not likely to be subject to negotiation. It is something that is going to be there to stay for the long term, and therefore he is not able and not in a position to negotiate the 10 percent baseline tariff.

However, he also pointed out that Singapore, being an important trading partner and a friend, he would like to explore creative solutions to see how we can strengthen the bilateral trade between Singapore and US, particularly with regard to critical exports from Singapore to US – exports that are important to us.

Some of you may recall that not long ago, the US announced that they were looking into potential tariffs, sectoral tariffs, on certain exports or imports into the US. These would include products like pharmaceuticals and other products. They already have specific tariffs on steel and aluminium and other products as well, so I think this is something that is going to be very important to us because pharmaceuticals are an important part of our exports to US.

It constitutes more than 10 percent of our total exports to US, so it is an important product for us, and as US is considering introducing new tariffs on pharmaceuticals, it is important to see how Singapore can seek concession from the US to facilitate our exports of these pharmaceuticals to the US, and how these concessions, what form it will take, I think it is something that we are still negotiating and not able to share in detail with you, but as you know, this is a very important part of the manufacturing sector, and it is an important part of our exports to the US, and the benefit that we can negotiate out of this bilateral relationship is very important.

Secretary Lutnick has emphasised several times that he is prepared to start this discussion with us because we are friends and important trading partners, and because US trusts us. So I think this is the basis of this negotiation, and in addition to that, we touched on the issue that is important to Singapore, and that is with regard to our access to high-end AI chips, and we also mentioned that during the Parliament sitting. It is an area that we are very concerned and we want to make sure that our companies will continue to access this critical technology. It is important for us in areas such as data centres, and as part of the discussion with the US Commerce Secretary, we also touched on this area.

Secretary Lutnick has said that, from his perspective, he is concerned about the export control of these chips, not just from Singapore, but generally. Therefore, we took the opportunity to explain to Secretary Lutnick about Singapore's export control system, and how we have been working together with the US counterparts in this area, to the extent that our law permits, and we take a very serious view of companies which violate our rules and regulations, and also, we do not condone companies who take advantage of their presence in Singapore to undermine export controls in most popular countries. Let me explain that.

I think Secretary Lutnick was satisfied with our system, and again, based on the basis of trust, he is prepared to look at how Singapore can work with the US to strengthen export controls for these high-end AI chips, to ensure that they end up with designated authorised end users, and because of that, he has suggested that we should work together to see how we can strengthen this arrangement, so that Singapore can be assured of continued supply and access to these high end AI chips.

This is again very important for the economy, because we have a growing sector of data centres and high-end computing business, and companies like, superscalers like Google, Amazon, Microsoft and so on. It is important for them to have continued access to these high-end AI chips. So, 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 US.

I must stress that it is not a done deal yet. There is still a lot of negotiation that we need to engage with the US, but it is a good start, and this whole process is really based on the basis of trust between the US and Singapore, which has taken us many, many decades to build. I think now it is time for us to leverage on this trust to progress the bilateral relationship between Singapore and the US, so I think that is an important announcement.

At the end of the discussion, both the Secretary and I agreed that we should press on with our discussion – we will look to explore practical solutions, practical ways to implement our agreements and see how we can do so quickly, and just focus on key considerations, so that it does not have a protracted process of negotiation.

So I think we agreed that at our different levels, we will continue to consult one another, to engage each other, to see how we can work out a creative way, or practical way, to implement some of these important decisions or important agreements between Singapore and US, to facilitate our trade, our exports to the US, as well as our access to the high-end AI computer chips.