'World entering dangerous new era': Singapore PM warns of '1930s-style' fallout from Trump tariff

Singapore Prime Minister Lawrence Wong warned that the global trading system is unraveling, marking a return to the kind of dangerous fragmentation that once led to world war. His warning came in the wake of U.S. President Donald Trump's sweeping new tariffs, which have already rattled global markets and upended decades of trade norms.

“My fellow Singaporeans, I've said before that the world is changing in ways that will disadvantage small open economies like Singapore. Some had previously questioned this assessment. But the recent Liberation Day announcement by the US leaves no room for doubt,” Wong said in a national address. “It marks a seismic change in the global order.”

Wong stressed that the U.S.—long the champion of free trade—was now abandoning the very multilateral system it built. “The era of rules-based globalization and free trade is over. We are entering a new phase—one that is more arbitrary, protectionist and dangerous.”

Markets across Asia reflected that reality this week, with the Hang Seng plunging 13.2%, Japan’s Nikkei dropping 7.8%, and Taiwan’s index falling a record 9.7%. Singapore was placed in the lowest base tier of Trump’s tariff plan, hit with a 10% levy. Countries like Vietnam, Cambodia, and China were slapped with even higher rates, up to 54%.

“For decades the US was the bedrock for the free market economies of the world. It championed free trade and led efforts to build a multilateral trading system anchored by clear rules and norms where countries could achieve win-win benefits through trade,” Wong said. “This WTO system brought unprecedented stability and prosperity to the world and to the US itself.”

“But what the US is doing now is not reform. It is abandoning the entire system it had created,” he added. “Its new approach of reciprocal tariffs country by country is a complete rejection of the WTO framework.”

Wong warned that if other countries follow the U.S. in ditching multilateral trade norms, small nations like Singapore could be “squeezed out, marginalized and left behind.”

He cautioned that Singapore will not retaliate but others may not hold back. “The likelihood of a full-blown global trade war is growing. The impact of the higher tariffs plus the uncertainty of what other countries may do next will weigh heavily on the global economy. International trade and investments will suffer and global growth will slow.”

As Singapore relies heavily on trade, the country could be hit harder than most. “The last time the world experienced something like this was in the 1930s. Trade wars escalated into armed conflict and eventually the second world war.”

“No one can say how the current situation will unfold in the coming months or years. But we must be clear-eyed about the dangers that are building up in the world,” he said. “Global institutions are getting weaker. International norms are eroding. More and more countries will act based on narrow self-interest and use force or pressure to get their way. This is the harsh reality of our world today.”

Wong urged Singaporeans not to be caught off guard. “We will stay vigilant. We will build up our capabilities. We will strengthen our network of partnerships with like-minded countries. We are more ready than many other countries with our reserves, our cohesion and our resolve. But we must brace ourselves for more shocks to come.”

“The global calm and stability we once knew will not return anytime soon. We cannot expect that the rules which protected small states will still hold,” he said. “Let us not be lulled into complacency. The risks are real and the stakes are high. The road ahead will be harder. But if we stay resolute and united, Singapore will continue to hold its own in this troubled world.”