On 9 April 2025, the United States announced a 10% blanket tariff on imports from countries — including Singapore — that haven’t retaliated against earlier US trade actions. There’s also a 90-day pause on further tariff escalation, set to end on 8 July 2025.
The introduction of these new tariffs and its impact on trade and the global economy could influence investor confidence, household sentiment, and ultimately, the property market here in Singapore. We’ve broken down how this could happen through 3 potential scenarios: if tariffs hold steady, escalate, or shift toward specific industries.
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Scenario 1: Baseline US Tariffs Remain at 10%
If the 10% tariff holds steady through the current 90-day pause, the direct economic impact on Singapore is expected to be relatively contained.
Economic context
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The Singapore Dollar (SGD) has strengthened against the US Dollar, softening the blow for exporters.
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Singapore’s export exposure to the US is limited relative to other major trading partners.
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The Monetary Authority of Singapore (MAS) has already eased monetary policy, helping preserve our competitiveness.
However, macroeconomic uncertainty may influence buyer sentiment in high-value transactions. Home purchases — especially those involving private condominiums — are sensitive to broader financial confidence.
Property market implications
Short-term:
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Private resale activity might slow down slightly, especially for higher-value transactions, as some buyers turn cautious.
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HDB resale demand will likely stay firm, although you may see longer decision cycles as families wait for more economic clarity.
Long-term:
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Singapore’s neutral positioning could attract multinational investments, especially if global supply chains shift.
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This could support demand for homes in the city fringe and prime areas, where foreign professionals tend to live.
While short-term sentiment may be affected by the broader narrative surrounding Trump tariffs, the underlying economic resilience of Singapore suggests that the housing market is likely to remain fundamentally sound in this scenario.
Scenario 1 Summary: If tariffs stay as they are, the property market might see a brief slowdown in pricier homes — but Singapore’s stability should keep things steady overall.
Scenario 2: US Tariffs Escalate After 90 Days
If the 90-day pause ends without resolution and the United States tariffs are escalated — whether by raising rates further or extending them to major trading partners such as China — the global economy could face a significant downturn.
Economic context
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An escalation of US tariffs may trigger retaliatory measures, dampening global trade flows.
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Singapore, as a highly trade-reliant economy, could be adversely affected, particularly in sectors such as manufacturing, electronics, and finance.
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The cumulative impact could lead to a broader global slowdown, and in a worst-case scenario, a recession.
Property market implications
Short-term:
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The market may experience a pullback in buyer activity across both HDB and private segments.
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Sentiment-driven demand may weaken, especially among investors and higher-income buyers.
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Singapore could see housing prices come down for the first time since the 2008 Global Financial Crisis and the COVID-19 pandemic, as part of a wider retreat across capital markets.
Wider context:
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Downward pressure would not be limited to real estate — equities, bonds, and other asset classes could also be affected as risk aversion rises and liquidity tightens.
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While this scenario is less likely given the potential global fallout, it remains a critical downside risk to monitor.
If enacted, a reversal or escalation of the current Trump tariffs would introduce substantial macroeconomic headwinds, with direct consequences for Singapore’s open economy and asset markets.
Scenario 2 Summary: If tariffs escalate, Singapore’s housing market could see price drops and slower demand — especially in the private sector.
Scenario 3: Industry-Specific Tariffs Are Introduced
If the United States transitions from blanket tariffs to industry-specific measures, the economic impact may be more measured and strategically focused. Under this scenario, tariffs would apply selectively to high-value sectors — such as advanced manufacturing or technology — rather than by country.
Economic context
The policy focus may include reshoring initiatives, such as prioritising US companies for government contracts and offering tax incentives to domestically based firms.
This approach could encourage production of strategic goods within the US while limiting broader trade disruption.
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Property market implications
Short-term:
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Minimal impact on Singapore’s property market, as targeted tariffs are unlikely to generate immediate volatility or weaken demand.
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Buyer and investor sentiment would likely remain stable in the absence of blanket trade restrictions.
Long-term:
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If sectoral tariffs lead to a stronger and more resilient US economy, global trade flows could stabilise.
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As a key node in regional and global supply chains, Singapore would likely benefit from increased investment confidence, business activity, and trade realignment.
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This would have a positive knock-on effect on the property market, especially in commercial real estate and high-demand residential segments.
By focusing on strategic industries rather than broad protectionist measures, this form of US tariff policy may allow for continued global economic growth — supporting housing demand and price stability in Singapore over the long run.
Scenario 3 Summary: Targeted tariffs are the least disruptive. Singapore could even benefit as global businesses adapt and reinvest in the region.
What’s Happening in Global Markets Right Now?
Beyond trade flows, the effects of the United States tariffs are being felt in global capital markets. As of the latest trading week, US equity markets have turned highly volatile, with major indices declining sharply.
At the same time, yields on the 10-year US Treasury note — often regarded as the gold standard for long-term interest rates — have inched upward, signalling deeper concerns.
Why is this unusual?
Typically, during periods of uncertainty, investors shift capital into safe-haven assets like US Treasuries, which would push yields down.
However, the opposite is happening: yields are rising, suggesting that investors are not moving into government bonds, and may be questioning the long-term strength of the US economy.
This shift reflects diminishing confidence in US fiscal stability, especially in the context of rising debt, potential inflationary pressures from tariffs, and the overall trajectory of economic growth.
Summary: Markets are getting nervous. Instead of flocking to safe assets like US Treasuries during uncertainty, investors are backing away — causing yields to rise. That’s a red flag. It shows growing doubts about the US economy’s long-term stability, especially with rising debt and inflation risks tied to Trump’s tariffs.
How This Affects the Fed and Global Interest Rates
The US Federal Reserve aims to maintain its benchmark interest rate — currently targeted between 4.25% and 4.5% — through various tools, with open market operations (buying and selling Treasury securities like 10-year T-notes) being one of the major levers.
While Treasury yields are a key indicator, they’re not the only factor the Fed looks at. Broader economic data such as inflation, employment, and credit conditions also play a crucial role in its rate-setting decisions.
That said, when Treasury yields rise unexpectedly — as they are now — the Fed may step in to buy more Treasury notes to bring yields down and maintain its target range. This means injecting liquidity into the economy, which could:
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Weaken the US dollar further, especially when paired with trade policy uncertainties.
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Increase inflationary pressures already introduced by Trump tariffs.
If, instead, the Fed chooses to raise interest rates further to offset inflation risk, it could place additional strain on credit markets and borrowers — both domestically and internationally.
Summary: When Treasury yields rise, the Fed has two choices — pump money into the economy to bring rates down, or raise interest rates to fight inflation. Both moves come with trade-offs. More liquidity could weaken the US dollar and worsen inflation from Trump’s tariffs, while higher interest rates could hurt borrowing and slow down growth worldwide.
What This Means for Singapore: Impact on SORA
In Singapore, the Monetary Authority of Singapore (MAS) doesn’t manage interest rates the way the US Federal Reserve does. Instead, MAS uses an exchange rate-based policy, adjusting the Singapore dollar’s value against a basket of currencies — including the USD. This is known as the Singapore Dollar Nominal Effective Exchange Rate (S$NEER) framework.
MAS’s main goal is to keep the SGD within a targeted policy band, which helps maintain price stability and economic growth. It doesn’t set a benchmark interest rate like the Fed.
So where does SORA come in?
SORA (Singapore Overnight Rate Average) is a market-based interest rate that reflects the average cost of overnight borrowing between banks in Singapore. It’s the benchmark rate for home loans today.
While MAS doesn’t directly control SORA, the rate is influenced by liquidity conditions and tends to move in line with global interest rate trends — particularly those driven by the US Federal Reserve.
Key Takeaways
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If the Fed injects liquidity to manage bond yields, the USD may weaken, and the SGD may strengthen. MAS could then adjust its exchange rate policy, which may help stabilise or even lower SORA, depending on how MAS responds.
Either way, now’s a good time to review your home loan. If you’re on a floating-rate package, check in with your bank or advisor. And if you’re thinking about buying, make sure you’ve budgeted for rate fluctuations.
Should You Buy, Sell or Hold?
There’s no one-size-fits-all answer. It really depends on your goals, financial situation, and how long you’re planning to hold the property.
But here’s what we know:
If you want personal guidance from a professional, our property agents are just a WhatsApp away. Drop us a message here.
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