Singapore exporters absorbing more than 20% of US tariff costs: Nomura
The Breakdown
In the wake of ongoing US tariff actions, Asian exporters face mounting pressure as they adapt to changing market dynamics. According to Nomura analysis, Singapore’s advanced manufacturing sector is absorbing over 20% of the cost impacts from US tariffs, while other ASEAN exporters—primarily with labor-intensive operations—are forced to pass nearly all additional costs to US buyers. Meanwhile, countries like China, Japan, and South Korea maintain more competitive positions, absorbing less than 10% of tariff costs but still contending with shrinking margins. The rapid divergence in strategies across Asia highlights both the differentiated capacities to weather shocks and intensifying competition between segments. The result is a market in flux, impacting sectors such as automotive, electronics, chemicals, and more, with a risk of further margin compression if trade tensions persist.
Analyst View
For B2B leaders in specialty chemicals and polymers, the tariff environment is changing the calculus of value delivery and supply chain resilience. As high-value manufacturers—like those in Singapore—demonstrate greater ability to absorb cost shocks, it becomes clear that operational flexibility and margin depth are strategic assets. In contrast, businesses with constrained pricing power, especially in labor-intensive sectors, find themselves compelled to transfer costs, threatening US market share and potentially destabilizing customer relationships.
Sectoral price trends further complicate this landscape. Chemicals, automotive, and electronics have seen falling export prices due to margin pressure, while pharmaceuticals and select equipment have seen prices rise. Cross-country competition is intensifying, with exporters adjusting prices aggressively, seeking to defend or expand market positioning. Temporary management tactics—such as cost-cutting, efficiency drives, and inventory adjustments—are delaying full pass-through of costs, but these measures are unsustainable amid persistent tariff regimes. This environment is marked by not only greater operational risk, but also a potential knock-on effect into capital expenditure, employment planning, and long-term strategy for export-dependent enterprises.
B2B leaders must now reassess the interplay between margin management, pricing strategies, competitive agility, and channel support. The ability to anticipate demand elasticity, navigate regulatory responses, and manage upstream and downstream value chain risks is rising in strategic importance.
Navigating the Signals
Looking forward, the standout factor is the need for proactive margin and channel management amid heightened market uncertainty. Organizations must challenge their assumptions about operational buffers and customer willingness to absorb higher costs. With temporary mitigation tactics reaching exhaustion and further US tariff escalation plausible, leaders should ask: What share of tariff risk can and should be absorbed versus passed through? Where does competitive position hinge on price, and where can it be defended through value-added offerings or superior service?
Leaders should pressure-test their organization’s flexibility: Are supply chains agile enough to shift sourcing and production in response to further shocks? Are key customer segments at risk of attrition due to price increases? What investments could strengthen the company’s hand in retaining market share amid regulatory volatility? In sectors where margins are already thin, companies should be prepared for potential slowdowns in capex or hiring if shocks persist. Ultimately, anticipation and preparation—not reaction—will separate those that maintain growth trajectories from those that fall behind.
What’s Next?
Breakthrough Marketing Technology supports B2B specialty chemical and polymer companies in assessing the scope and impact of external shocks—such as tariffs—on their growth strategies. Our solutions help you to:
- Quantify margin vulnerabilities across value chains and map alternative scenarios.
- Identify critical exposure points in supply, pricing, and customer retention.
- Develop robust strategies for channel and market positioning should further shocks occur.
- Align leadership on the most actionable priorities to preserve growth and competitiveness.
Our market intelligence frameworks provide clarity—arming you to make evidence-based decisions and pursue opportunity, even in uncertainty.
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