Singapore Warns Against Retaliatory Tariffs Amid Technical Recession Risks

Singapore’s central bank chief economist Robinson cautioned against tit-for-tat tariffs at a recent meeting, highlighting their potential to exacerbate supply chain disruptions. "Retaliatory measures worsen the growth-inflation trade-off and create monetary policy complications," he stated, invoking the maritime metaphor: nations should avoid "throwing rocks into their own harbors."

The commentary comes as Singapore, which maintains a free-trade agreement with the U.S. despite running a trade deficit, faces 10% baseline tariffs from Washington. Protectionist measures distort resource allocation and reduce consumer welfare through higher prices and diminished choice, Robinson emphasized, noting that both tariff-imposing and targeted economies suffer collateral damage.

Instead of trade barriers, officials advocate accelerating regional integration in digital commerce and services. The warning carries particular weight as the trade-dependent nation confronts technical recession risks, with global trade tensions threatening to compound existing economic headwinds.