Hard to make the case for new US global tariffs to apply to Singapore: Ex-US envoy

No evidence of balance of payments or currency crisis in the US to justify Sec 122 tariffs, economists say. Read more at straitstimes.com.

HOUSTON – Is the US economy in hot water or is it the “hottest economy in the world”, as President Donald Trump likes to say in nearly every speech?

That is a key question now that Mr Trump has invoked a law designed to be used when the US economy is in serious crisis, in order to impose a new global tariff of 10 per cent on nearly all goods imported into the US – including from Singapore.

These tariffs –  imposed in the wake of a US Supreme Court ruling on Feb 20 that declared most of Mr Trump’s “reciprocal” tariffs illegal – have been imposed under Section 122 of the US Trade Act of 1974. 

It is a power granted by Congress as a remedy – the tariffs can only last for up to 150 days – when the US economy experiences “large and serious balance-of-payments deficits” or faces “imminent and significant depreciation of the dollar”.

Except, most economists concur that the US is facing no such crisis. And legal experts predict imminent suits in the Court of International Trade in Washington DC, challenging the use of a statute that no president has invoked until now. 

The tariff is especially jarring when it comes to Singapore, a free trade partner and one of the few Asian economies with which the US has consistently run a trade surplus.