Trump’s victory, how will Singapore be affected?

Donald Trump, who just recently accused Singapore of stealing American jobs – reached a restounding victory to the seat in the Ovalhouse.

Shocked by this incredible result of the US election, Singaporeans were left guessing the future of the country’s longstanding partnership with the United States under the Republican President-to-be, Donald Trump.

 

Singapore Prime Minister, Lee Hsien Loong, was among the first world leaders to congratulate Trump.

“Congratulations to President-elect Donald Trump! His candidacy took many by surprise,” PM Lee said in his Facebook post.

He wrote, “US voters have elected a president whom they feel best represents them. Singapore fully respects their decision. We will continue to work together with the United States to cultivate our strong ties”.

 

Political and economic observers said Donald Trump victory may bring uncertainty to the US-Singapore bilateral relationship, adding threat to the looming recession already felt in the island.

Singapore is smaller than New York City but it is one of Washington’s most important economic and strategic partners in Asia.

US is one of Singapore’s biggest trade allies, and the island nation provides a key US military logistics base which enables the rotational deployment of the US coast combat ships out of its naval bases.

Over the last weekend in his last rally before Americans went to the polls, the anti globalisation Donald Trump, addressed his supporters in Tampa, Florida with a main focus point: American jobs.

The Asian countries where American companies swarmed to set up local bases in the past decade or two, were obviously China and India.

Especially after China entered the World Trade Organisation, 70,000 factories was moved away from America, and Trump called it the ‘the greatest job theft in the history of the world’.

This is mainly due to the manufacturing plants that were relocating to these countries, because the operational costs are lower. Stating the individual companies who were guilty of this ‘theft of jobs’. First on the chopping block was Goodrich Lighting Systems who moved to India, laying off some 255 Americans.

Trump also singles out Baxter Healthcare Corporation for laying off 199 workers in their move to the city state.

Mentioning Baxter and Singapore as if this was some recent occurrence, and that Baxter now has zero presence back in its home country; but that is far from the truth.

Baxter’s corporate page still states their headquarters location is in Deerfield, Illinois, with a manufacturing plant in the same state at Round Lake, while their other US plants are spread throughout the states.

Overall, they employ more than 65,000 employees who are scattered over 100 countries. Other than that, Baxter actually has been around in Singapore since 1978.

History of Baxter in Singapore / source: economic development board
History of Baxter in Singapore / source: economic development board

Baxter picked Singapore as home to its regional headquarters for the Asia Pacific region, supporting their plants located in Australia, Japan, China, India, and the Philippines.

Where will Singapore go with a Trump US?

Bernard Aw, a Singapore-based economist with IHS Markit, said, “The uncertainty about the direction of America’s foreign and trade policies will be problematic for Singapore, given that our economy relies heavily on global trade.”

“Any rise in trade protectionism and threats to global security will have a strong negative impact on Singapore’s open economy.”

“Increasing volatility in global financial markets, including major swings in commodity prices may also affect Singapore indirectly,” Aw said.

 

Prior to his election, Trump had said he would kill the Trans-Pacific Partnership free trade deal, of which Singapore is a key signatory to the deal.

Prime Minister Lee Hsien Loong had recently spoke about the situation if the TPP was not to be passed. He said:

“Your standing goes down with many countries around the world. Your opponents as well as your friends will say, “You talked about the strategic re-balance, you talked about developing your relationships. You can move aircraft carriers around. But what are the aircraft carriers in support of”? It has to be deeper economic and broad relationships. You do not do things which the Chinese do. The Chinese go around with lollipops in their pockets. They have aid, they have friendship deals, they build you a Prime Minister’s office or President’s office, or Parliament House or foreign ministry. For them, trade is an extension of their foreign policy.

You do not do these retail items. The one big thing which you have done is to settle the TPP, which Obama has done. It shows that you are serious, that you are prepared to deepen the relationship and that you are putting a stake here which you will have an interest in upholding. Now, let’s say you cannot deliver on the TPP. After you have gotten Vietnam to join, after you have gotten Japan to join, after Japanese Prime Minister Shinzo Abe has made very difficult arrangements on agriculture, cars, sugar and dairy. Now you say, “I walk away, that I do not believe in this deal.” How can anybody believe in you anymore?

It is not just on trade, even on strategic issues. The key thing in Northeast Asia is North Korea. They are unpredictable, they are developing their nuclear capabilities and their missiles. You do not want the South Koreans to do that, you do not want the Japanese to do that. What is the restraint on them? It is your credibility as an ally and as a deterrent. I do not think failing to ratify the TPP will strengthen that at all, or help Mr. Abe, who has gone out on a limb to support this and is in the process of ratifying it right now.”

South China Morning Post reported, David Adelman, a former US ambassador to Singapore said, “A Trump victory clearly does not bode well for a continuation of the Obama trade and investment initiatives which have been the centerpiece of America’s pivot to Asia.”

Trump’s lack of a well known track record in Asia ‘presents a challenge to our friends and allies in the region,’ said Adelman, now a partner with the law firm Reed Smith.

Singaporeans living in the United States told This Week in Asia there was a sombre mood at gatherings held to watch the election results.

Shafali Gupta, a Singaporean who was at an ‘election night party,’ said, “People are deflated and everyone is shell shocked. Some people are sobbing.”

“Singaporeans like us are not going to be first people he is going to go after. We are here legally and in higher end jobs. Still, he has proven to be unpredictable, and you don’t know what he will do,” he said.