Senior Minister Lee Hsien Loong expresses Singapore’s hope for continued global trade growth despite future uncertainties and turbulence.
The world cannot assume that global trade will continue to keep pace with Gross Domestic Product (GDP) amid heightened strategic tensions and policy uncertainties, including those triggered by a new administration in the US, Senior Minister Lee Hsien Loong stated.
Should the trade-to-GDP ratio begin to fall, serious economic and strategic consequences will follow, at the very least dampening economic growth in many countries, said SM Lee during a lecture at the opening of Singapore Maritime Week. This would also create further social and political problems both domestically and internationally.
“In such an event, the world would truly enter a new era, not seen since the Second World War,” the former prime minister said on March 24, adding that this moment could mark the “next turning point.”
SM Lee expressed Singapore’s hope that global trade will continue growing, despite the uncertainties and turbulence ahead. This growth is not just vital for sustaining the maritime industry but also for enabling more productive and prosperous lives across the globe.
Singapore’s task, he said, is to play its part in enabling and fostering the growth of international trade, while making its economy and maritime sector more efficient, competitive, and trusted.
This is so that others will still wish to trade and do business here, regardless of the state of the world, allowing the Republic to continue securing its livelihood, he added.
Over the past 60 years, Singapore’s economy has flourished alongside globalisation. The world was generally peaceful and stable, with the global order underpinned by the US, supported by its allies in Asia and Europe, SM Lee explained. It was during this time that multilateral institutions, such as the United Nations, were established, and international laws and treaties were negotiated and adopted. This included the UN Convention on the Law of the Sea, a universal legal framework governing the oceans.
Countries both large and small generally acknowledged these international rules and norms, understanding that economic liberalisation and freer trade would benefit everyone, SM Lee noted.
“Many countries acted on this understanding and reaped the rewards, including small economies like Singapore and large ones like China,” he said.
As international trade boomed, the global maritime industry expanded alongside it.
“Singapore rode these waves and made the most of them,” said SM Lee. “We made investments and implemented policies to establish an open, reliable, and trusted trade and maritime hub.”
This allowed Singapore to become a key link in global supply chains, “a gateway between East and West,” said the Senior Minister.
Shifting Attitudes Towards Trade
However, it is a different world today, with changing attitudes towards trade and shifting trade patterns, SM Lee noted, as geopolitical developments have severely strained the global trading system.
As tensions between the major powers have escalated over the past decade, nations have become increasingly anxious to outpace one another.
“They are prioritising security, resilience, and self-reliance over interdependence and cooperation,” he added.
Once optimised for economic efficiency, supply chains are being reconfigured through “friend-shoring, near-shoring, and re-shoring.”
Friend-shoring refers to rearranging supply chain networks to focus on a country’s allies. Near-shoring is when companies relocate operations to a neighbouring country, often with a shared border, while re-shoring is when a business moves operations back to its home country.
In addition to these supply chain challenges, restrictions have been imposed on items that can help preserve a country’s lead over competitors, including investments, data, critical minerals, and semiconductor chips.
“Some major powers are adopting a more transactional, sometimes coercive, approach to achieving immediate goals,” SM Lee said.
For example, the new US administration believes that, under the previous system, the US was treated unfairly by its trading partners, both allies and adversaries, he noted.
This is “far from the previous win-win perspective of international trade, investments, or multilateral agreements.”
The US now views tariffs not only as an economic tool of choice but also as a bargaining chip in non-economic areas, to protect its broader national interests, SM Lee explained.
Other countries have responded in kind, and these strategic and policy shifts are reshaping the global trade landscape.
Earlier in 2025, US President Donald Trump announced significant new import taxes aimed at Canada, Mexico, and China, the three largest trading partners of the US. China and Canada retaliated by imposing their own tariffs.
The maritime industry has been directly affected, with countries acting to reduce reliance on competitors for freight shipping and shipbuilding, or to displace rivals controlling strategically located ports, SM Lee noted.
Significant Impact on Trade-Dependent Singapore
These global shifts will have a major impact on Singapore. “To us, trade is existential,” said SM Lee, adding that the maritime industry is also a key contributor to Singapore’s economy.
But while trade faces substantial headwinds, globalisation is unlikely to fully reverse itself, SM Lee said, as the world still needs to trade, and countries still need to do business with one another.
This is a matter of survival for many nations, as more than 80 per cent of the world’s population lives in countries that are net importers of food, including Singapore, he explained. “Without trade, these countries would simply starve.”
For other countries, trade is a vital driver of prosperity, enabling the international division of labour and creating efficiencies and economies of scale.
“No country can produce a modern car, aeroplane, or mobile phone without relying on materials and components from abroad, usually from many countries,” SM Lee said.
He noted that for decades up until the global financial crisis (GFC) in 2008, international trade grew faster than world GDP.
In the 1950s, international trade was around 15 per cent of global GDP. By the time the GFC hit, this figure had risen to 55 per cent.
“This is how countries around the world sustained economic growth and productivity gains, steadily improving their peoples’ lives,” said SM Lee.
While globalisation slowed after the GFC, international trade generally kept pace, remaining at 55 per cent of world GDP.
In the decade and a half since the GFC, world trade continued to rise, reaching a record US$33 trillion (S$44 trillion) in 2024.
Remaining Open
To support the growth of international trade and bolster its economy, Singapore is committed to remaining open, SM Lee said.
“Even as globalisation recedes, many countries still believe that trade can be a win-win situation and wish to preserve as much of the benefits of the multilateral trading system as possible,” SM Lee stated.
Singapore will continue to support a multilateral, rules-based order, international cooperation, and interdependence.
Singapore joined the International Maritime Organisation, a UN agency, shortly after its independence, and became a council member in 1993.
Singapore also hosted the first general assembly of the International Organisation for Marine Aids to Navigation, which harmonises global maritime navigation systems, in February.
“Beyond multilateral frameworks, we pursue many regional and bilateral trade partnerships and arrangements,” said SM Lee.
Singapore has 27 free trade agreements, which collectively cover 90 per cent of its trade, and is “doubling down on staying open,” he added.
Singapore will continue to strengthen itself as a regional hub and global node, as modern Singapore has grown and prospered by “being an entrepot, an emporium of the Orient,” SM Lee said.
The city-state has also steadily invested in its port infrastructure and built an ecosystem to support the maritime industry, including its ports, shipping lines, shipyards, bunkering services, and legal services.
Today, Singapore is one of the busiest ports in the world, with more than 1,000 vessels in port at any time, said SM Lee. The maritime sector contributes to more than 6 per cent of Singapore’s GDP and provides around 140,000 jobs.
SM Lee said Singapore will continue to develop the maritime industry and invest in capabilities and infrastructure, such as the upcoming Tuas mega port, as well as help mitigate climate change.
He noted that Singapore’s maritime workers must be prepared to take on new and more productive roles, and not be sidelined or displaced by technology or artificial intelligence (AI).
Therefore, the Republic is investing heavily in its people, such as upskilling them to operate new AI and digital systems, and advanced technologies like drones and underwater robots.
On the climate front, Singapore has committed to peaking emissions before 2030 and achieving net-zero emissions by 2050.
“This is an extremely difficult task for an island nation with hardly any energy resources of our own, whether renewable or fossil,” SM Lee explained.
To tackle climate change in the maritime industry, Singapore is investing in green technologies and alternative fuels, as well as training workers to handle such fuels in preparation for their widespread use.
While the world cannot escape the turbulent times ahead, “if we plan ahead and take the right steps now, we have every chance of continuing to thrive,” he concluded.
More than 1,000 people attended the opening ceremony of the Singapore Maritime Week at the Suntec Singapore Convention and Exhibition Centre on March 24, including Singaporean and foreign government officials, staff from port authorities, industry leaders, and maritime professionals.
The 19th edition of the Singapore Maritime Week, which will be attended by more than 20,000 people from nearly 80 countries, runs from March 24 to 28.
