SINGAPORE – An e-book guide to help businesses find out how they would be affected by tariffs has been compiled by the Singapore Business Federation (SBF), which is also drafting measures to help firms find financing and diversify their supply chain.
Speaking to The Straits Times ahead of the launch of the playbook on May 22, SBF chief executive Kok Ping Soon outlined the apex business association’s plans, including its intention to provide longer-term advice to firms on tariff matters.
He said: “Companies are saying that they are concerned about reduced credit limits, increased collaterals, stricter governance. And it is now that they need longer and larger financing.”
The funds are not only to deal with the front-loading of purchases by buyers that are stockpiling goods before any end to tariff reprieves, but also to tide businesses over smaller orders and higher administrative costs for trade compliance.
SBF – the business community’s representative on the Singapore Economic Resilience Taskforce to counter rising trade barriers – has asked to be updated on failed applications for the government-backed Enterprise Financing Scheme.
Firms, especially small and medium-sized enterprises, apply for these loans through financial institutions and are subject to conditions such as shareholding, credit worthiness and solvency status.
Mr Kok said: “We may want to make representation on behalf of the businesses to the Government to consider. Perhaps the risk-sharing can change, perhaps the quantum can change, or perhaps the tenure can change.”
The association is also asking the Government to consider funding trade advisory experts for businesses to legitimately get around the new and tighter Customs administrative procedures and documentation.
Consultants have said that this could be done by reflecting the value of goods before mark-ups by intermediaries or by firms splitting their purchases.
“We have a team of advisers that can help companies navigate, but there’s a limit to how much they can provide. These are free advisories,” Mr Kok said.
On the findings of a business sentiment poll conducted in April covering 294 firms, Mr Kok said one in two businesses expects costs to rise, and 75 per cent of them foresee revenues will fall. Seven in 10 plan to pass on all or part of the added costs to customers.
Bosses also worry about currency fluctuations, supply chain reconfigurations and retaliatory measures.
A surprise, Mr Kok said, is that firms are already planning to diversify sales markets and supply sources.
“Our companies are not just not doing anything,” he said. In fact, one in three firms is exploring alternative sourcing and buying.
“South-east Asia is obviously the top choice, but it looks like our companies think quite far, because No. 2 was Europe and No. 3 was the Middle East,” he added.
Mr Kok noted that Singapore firms are already planning to diversify sales markets and supply sources. ST PHOTO: MARK CHEONG
He expects the services sector, which includes logistics and professional services, to bear the trickle-down effects of the tariffs eventually as investors turn cautious.
The Government lowered 2025’s economic growth forecast to a range of 0 per cent to 2 per cent, down from the previous estimate of 1 per cent to 3 per cent after the US slapped the wide-ranging tariffs in April on its trading partners.
Mr Kok said: “We want to work with the Government to implement very practical solutions to support what is important – addressing firms’ financing, helping them in advisory and compliance, and helping them to diversify sooner than later.
“Any help that businesses need to fulfil these three things, we want to work with the Government to make it happen.”
Regionally, the organisation plans to amplify Singapore’s call for open trade and cooperation.
“There is a saying, in Asean, you either hang out together or you get hung separately,” he said.
But whether the regional grouping will band together or veer towards bilateral trade pacts remains a question, he added.
Fresh from a trade mission to the US, Mr Kok said new opportunities still exist. “If China has to be disengaged from the US, can Singapore companies fill the gap?”
And while the US accounts for about 12 per cent of global trade, Singapore firms can tap the Republic’s 28 free trade pacts with 65 countries and play in the remaining 88 per cent.
The 20-page playbook, which the federation put together with consultants such as PwC Singapore and Rajah & Tann Asia, advises businesses to understand their trade exposure, financial vulnerabilities and supply chain risks, then act to stabilise operations, reconfigure sourcing strategies and take advantage of Singapore’s free trade partnerships.
Those two steps could be done in 12 months, it noted, after which firms could focus on building long-term resilience with digitalisation, innovation and raising productivity.
The e-book ends with a checklist.
Mr Kok said: “It may look very daunting, but if you look through each of it, some of these are quite basic. You need to ask your finance people, your trade people, your suppliers.
“If there’s one area where businesses need a bit more help, it is the first part.”
Companies may need support getting hold of Customs and trade data, and interpreting and applying the data to their trade activities, he explained.
SBF is asking its consultancy partners if they would offer some trade advisory services at no cost on a regular basis.
Mr Kok said: “We hope that the industry partners will be happy to support this initiative.”
Both the playbook and poll results can be found on the SBF website.
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