Publication Type

Working Paper

Version

publishedVersion

Publication Date

8-2026

Abstract

This paper examines Singapore’s structural position in global value chains (GVCs) and the implications of the second Trump administration’s tariff escalation for Singapore and the broader ASEAN region. We proceed in three parts. First, using the ADB Multi-Regional Input–Output (MRIO) tables for 2019 and 2024, we characterise Singapore’s GVC participation and position. Singapore is the most GVCintensive economy in ASEAN, with nearly half of its gross exports comprising foreign value-added and a markedly downstream orientation. China is its dominant upstream partner across manufacturing and services—intermediating over 27% of foreign content in electronics and over 10% in chemicals—while Malaysia, Taiwan, and Thailand serveas secondary upstream intermediaries. On the downstream side, China and Malaysia are the primary downstream intermediaries of Singapore’s embedded value-added; the United States is notably absent from the top downstream partners in most sectors, making Singapore’s welfare exposure to U.S. tariffs a general-equilibrium rather than a direct-exposure story. Singapore’s hub and authority scores are highest in financial intermediation, water,transport, wholesale trade, electronics, and chemicals, identifying it as the foremostnetwork node in ASEAN. The bilateral Singapore-Thailand GVC linkage is especially pronounced, with Singapore serving as the dominant downstream intermediary for Thai content in transport, logistics, financial services, and business activities. Second, drawing on the tariff tracker and general equilibrium simulations of the SMU Trade Dashboard, we characterise the full sequence of Trump II tariff events of 2025–2026 and quantify their effects on trade patterns, welfare, and nominal wages across all ten ASEAN economies. Singapore’s position as the only ASEAN economy held at the 10% reciprocal-tariff floor would generate textbook trade diversion throughout the episode: its simulated exports to the United States would rise by 26% at the Liberation Day peak even as neighbours’ would collapse by 19–55%, and—even after the February 2026 return to a uniform 10% Section 122 tariff equalises country-specific rates—would remain 13.6% above the pre-Trump II baseline, due to general equilibrium effects and the fact that itsexport basket carries lower Section 232 (product-specific) tariff exposure than those of its neighbours. Yet Singapore would sustain the largest aggregate welfare loss in ASEAN throughout, up to −2.5% (OECD ICIO) and −2.7% (ADB MRIO), because its deep GVC centrality would transmit the global trade contraction directly into its small, open economy. Third, we draw out the policy implications for each actor. For Singapore, the priorities are reducing upstream concentration on China by deepening ASEAN sourcing partnerships, building intra-ASEAN downstream demand channels, defending transshipment integrity as tariff-rate dispersion across the region creates origin-shifting incentives, and expanding the high-value services node in segments that are structurally insulated from goods-trade tariffs. For Thailand, the central responses are deepening the bilateral GVC corridor with Singapore and diversifying export markets beyond the United States. For ASEAN collectively, the episode underscores the need for harmonised rules of origin under RCEP and the CPTPP, a joint tariff-monitoring and rapid-response mechanism, and a region-wide framework with the United States that provides binding tariff commitments rather than leaving individual members exposed to asymmetric bargaining. Across the various dimensions examined, one policy implication stands out: in an era of heightened tariffuncertainty, resilience is strengthened not by retreating from global value chains, but by deepening regional GVC integration.

Keywords

Global value chains, GVCs, Trump II tariffs, ASEAN, Singapore, Thailand, Trade diversion, Trade policy, Welfare effects, Regional integration

Discipline

Economics

First Page

1

Last Page

32

Publisher

Singapore Management University

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