- Singapore’s MAS deputy director advises against tariff retaliation.
- Asian economies need to intensify regional trade integration services.
- Protectionism and import taxes disrupt resource allocation and lower the consumer surplus.
A senior official from Singapore’s Monetary Authority (MAS), Edward Robinson, has warned that a tit-for-tat approach on tariffs would harm both the issuing and receiving economies. Robinson advised that instead of following the path of retaliation, Asian economies must aim to remain agile.
According to Robinson, who serves as Deputy Director and Chief Economist at MAS, engaging in retaliatory tariffs would lead to negative supply shifts, worsening the growth-inflation trade-off and complicating monetary policy.
He strongly advised that the focus should be on maintaining the existing global system and avoiding actions that could be detrimental to economic stability, colorfully urging against “throwing rocks into their harvest.”
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Robinson: Retaliatory Tariffs Harm Growth, Complicate Monetary Policy
Instead of retaliation, Robinson believes intensifying regional trade integration initiatives would help Singapore and other Asian economies absorb the tariff shocks. The MAS Chief Economist specifically cited digital services trade and cross-border investment as positive moves under the current international trade dispensation.
Robinson further stated that protectionism and import taxes disrupt resource allocation and lower the consumer surplus. According to the economist, deploying such an approach would expose domestic households to higher prices and fewer choices. Overall, the economic analyst noted that such an approach would cause both the targeted and the tariff-imposing economies to suffer.
US Imposes Tariffs; Singapore Grapples With Recession Risks, MAS Stays Course
This guidance comes as the United States had imposed a 10% baseline tariff rate on Singapore, despite an existing free-trade agreement between the two nations. Beyond Singapore, the US has also threatened to impose much higher tariffs on other Asian economies, even though it has implemented an interim 10% tax for now, with unconfirmed plans to potentially roll out a new, broader tariff regime by July.
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Meanwhile, the Singaporean economy faces the risk of a technical recession after reporting a 0.6% contraction in the first quarter of 2025. According to Singapore’s report, the economic contraction had nothing to do with tariffs from the US, considering the timing under review. It is worth noting that the MAS reviewed its policies in January and April this year, and Robinson does not see any reason to make further reviews.
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