Australia, Singapore Choose Future Amid Trump Tariff Pressure

On Saturday (3/5/2025), Australia and Singapore held general elections. These elections are under pressure from global geopolitical and geo-economic factors. For the first time, Singapore and Australia seem to have been "stabbed in the back" by their closest ally, the United States.

On April 2, 2025, U.S. President Donald Trump announced Liberation Day. He imposed import tariffs on all friends and foes of the United States. This action is considered by U.S. allies as a betrayal of their friendship.

Australia is not exempt from the tariff imposition. Previously, Prime Minister Anthony Albanese expressed confidence that the "Land Down Under" would not be subjected to tariffs. They have a significant trade deficit with the United States. Unexpectedly, Australia was hit with a 10 percent tariff.

“This is not something someone would do to a friend,” Albanese said of the incident.

Even more confusing, the outer islands of Australia are subject to their own tariffs. In fact, MacDonald Island, which is a penguin sanctuary and uninhabited by humans, is also subjected to tariffs.

Richard Holden, an economics lecturer at the University of New South Wales, explained that the impact of Trump's tariffs is directly felt by Australia. "The prosperity of our country comes from international trade. Any barriers there affect the lives of the Australian people," he stated to SBS.

The trade war between the US and China risks causing a contraction in the Chinese market. Holden explained that China is a very important market for Australian products. In fact, in the higher education sector, the majority of international students come from China and are not on scholarship programs.

“Every business, from the big box to the coffee shop, in Australia is affected if Chinese consumption decreases,” Holden said.

The United States is one of Australia's trading partners. The country exports beef to the United States as a flagship commodity. In fact, beef accounts for 15 percent of exports to the "Land of Uncle Sam." The imposition of a 10 percent tariff will adversely affect cattle ranchers.

The US is only 4 percent of Australia's direct export market, according to the Financial Review. However, the US is important in the global supply chain scheme.

This is because Australia exports raw minerals and metals to China and other Asian countries for processing. The finished products include electronic equipment and batteries, which are then exported to the United States.

"The trade war between the United States and Asian countries will impact our raw material exports to Asia as the United States reduces imports from Asia. Australia's supply chain is disrupted," said Gareth Spence, an economist at the National Australia Bank.

In this election, both the Labor Party and the Liberal-National Party have pledged to negotiate tariffs with Trump. They promised the people to lower the prices of essential goods.

In light of this situation, a question arises: what will Australia do moving forward? Will they strengthen cooperation with Southeast Asia and the Pacific in strategic sectors?

"All this time, collaborative solutions with joint capacity building in Indonesia have not been effective. Instead of forging close defense cooperation with neighboring countries, Australia has joined AUKUS," said Faisal Karim, an international relations expert at the Islamic University of Indonesia, Friday (2/5/2025).

AUKUS is a defense alliance between Australia, the United Kingdom, and the United States. This decision undoubtedly stems from Australia's mentality of considering themselves a white nation far in the southern hemisphere.

This view is explained by Allan Gyngell in his book, Fear of Abandonment. Australia is afraid of not being considered by Western countries as part of that culture. As a result, Australia feels more part of the West than its geographical location near Southeast Asia and the Pacific.

For a long time, Australia has believed that the "enemy" comes from the north. In this context, it refers to the influence of China. In reality, a better approach would be to foster cooperation with Southeast Asian countries. However, Australia has chosen the AUKUS path.

"Now, surprisingly, it is the US that is leaving the alliance," said Faisal.

He stated that the world is waiting to see whether Trump's imposition of tariffs and the instability of the AUKUS alliance due to the behavior of the United States will serve as a wake-up call for the political elite in Australia. Will they view Southeast Asia and the Pacific as equal strategic partners?

Singapore has also been hit by Trump's tariffs. Compared to other Southeast Asian countries, the tariff for Singapore is very low, at 10 percent. This is in contrast to Cambodia, which faces a tariff of 49 percent, Vietnam at 46 percent, and Indonesia at 32 percent.

However, Singapore's economy is entirely dependent on global trade. Prime Minister Lawrence Wong explained that U.S. protectionist actions disrupt global exports and diminish investor confidence. As a result, the economy is slowing down.

UOB bank data reveals that Singapore is highly dependent on demand from the US market. As much as 11 percent of the commodities of goods and services transiting in Singapore have the US as their final destination.

This economic slowdown is detrimental to Singapore, which is still striving to stabilize itself in the aftermath of the Covid-19 pandemic. According to media reports from Mortgage Master, the sectors that will be affected include the prices of houses and apartments. This encompasses the risk of rising mortgage payments, while the country is still facing inflation.

Amid this geo-economic pressure, observers predict that the People's Action Party (PAP) will win the election. This party has been in power since Singapore was granted independence by Britain in 1965. The public is believed to be unwilling to take the risk of voting for another party that has never held government control.

“It remains to be seen whether people see Singapore’s political system as mature and strong enough to accommodate other parties in parliament and ensure the economy remains stable,” Eugene Tan, an economist at Singapore Management University, told Firstpost.