Chairman’s Note

Private and Confidential
For SIIA Corporate Members and Advisors
February 2025

Responses to Trump 2.0

Please allow me to start by wishing you a good start to the new year. I thought I would wait until the start of February to send you my first chairman’s note of 2025. This was given the new year breaks plus the inauguration of US President Donald Trump.

Much is unfolding and quickly. More than a few of our members (and indeed our policy makers) are thinking through what the USA will do and, even more importantly, how our region and Singapore can and should respond. Please allow me to share some perspectives on this, on a private and confidential basis, as our member and friend. While the situation is complex and fast evolving, some broader points that I hope are key do follow.

1. Trump 2.0 is Different and Consequential: This is different from Trump 1.0. “Make America Great Again” is more than a slogan and dominates the Republican Party which, for now, enjoy majorities in both Houses of Congress. The changes aim to make large scale impacts. Trump, never modest, intends that his second and final term will change politics and be of historical consequence. The real restraint on Trump’s initiatives will not be political but market driven. If and when his initiatives on tariffs or other issues conflict with delivering a feel-good economy, expect him to take note and perhaps tweak if not pull back.

2. Indispensable but Unpredictable: Do not expect consistency or predictability, however; Trump has never been held to the strict letter of every word. Expect action, fast and thick, at the speed of a tweet. This is combined by strengths not least in military and finance. China and others have risen but the USA remains the indispensable power. If there is a challenge, say, to the dollar’s dominance, they will act pre-emptively to cajole and punish.

3. China is a Competitor, Others Irritate: Many note that Trump has raised tariffs by 10% not only against China but also an additional 25% on Mexico and Canada—with whom he had previously deepened trade ties. He is unpredictable and will act against any country – friend or otherwise – if there is an issue he wants to push. But with China, there is an additional factor: that it is seen to be a direct competitor. This does not mean he will always push China to the maximum – he feels he is a deal maker and unpredictability is his tactic. But the overall thrust against China will be directed in terms of competition, whereas others can hope to deal with issues as they arise.

4. Strengthening Borders, Pushing Out: Trump’s first moves deal with his ideas of MAGA applied to its nearby interests: Canada and Mexico and fentanyl, clearly. But this is also seen in early statements about Greenland, Panama Canal and even EU defense spending. These may have a pattern in securing defense and border capabilities in the American and Western hemisphere, increasing security for Americans at home without engaging in distant wars.

5. Asean, Ignored? Asean is not strongly on the USA’s radar like China or others at present. There should be watchfulness and preparation about issues that could arise. The decision of some to join BRICS, which Trump sees as pointed against the USA and its dollar dominance. Overt pro-China actions will also be noticed. The large trade surpluses that some countries like Vietnam have with the USA are other red flags. Overall, Asean may do better to be ignored for the wrong reasons rather than being pressured to be more pro-America.

6. Is Singapore Well Positioned? The actions of the Trump presidency will be of consequence to Singapore as an open economy, and one that enjoys good relations with both the USA and China. Tariff escalations and trade war may not be waged directly against us but impacts on the global system will ripple and affect Singapore. There are factors to ameliorate. In USA-Singapore trade, it is the USA that enjoys a surplus. Singapore is the major recipient for American FDI, totaling S$716 billion in 2023, and regional HQ for American investors and corporation. Our government has been of assistance to Trump before, with the North Korean summit, and is willing to support initiatives. Singapore has a strong network in the American political system and efforts have been made to cultivate ties with the Trump circle and administration; his 2024 win was not unexpected, unlike Trump 1.0.

7. Links with China should continue, but, as I voiced in my Business Times commentary on 4 Feb, will need to take into account the American position. The aim is not to be bullied or bend to Trump’s will but to keep engaged with the USA and all sides. This will require reaching out.