[WORLD] Prime Minister Lawrence Wong warned that escalating conflicts between the United States and China would have "disastrous consequences" for the world, destabilising both countries' relationships.
On April 8, he delivered a wide-ranging address in Parliament on the impact of tariffs, outlining the probable implications of the Trump administration's decision on US-China ties.
The escalating tensions come at a time when global supply chains, still recovering from pandemic disruptions, face renewed pressure. Analysts warn that further trade barriers could exacerbate inflation, particularly in sectors reliant on Chinese manufacturing, such as electronics and renewable energy components. This could have ripple effects on consumer prices worldwide, hitting lower-income households the hardest.
The US sees China as a strategic competitor and threat that must be addressed now, while the US still has an advantage, he said. He went further: "China says it is ready for a tariff war, trade war, or any other type of war, the US has now threatened an additional 50 per cent tariff on China, and China says it will fight to the end."
Behind the rhetoric, both nations are preparing for long-term economic decoupling. China has ramped up investments in domestic semiconductor production and alternative export markets, such as Southeast Asia and Africa, to reduce reliance on US demand. Meanwhile, the US continues to incentivize reshoring of critical industries, including clean energy and advanced manufacturing, through subsidies like the Inflation Reduction Act.
There are also fewer routes for discussion, which can serve as guardrails to help control the relationship, he said. “We must be mentally prepared. The predictable and rules-based order we once knew is fading,” PM Wong said.
The erosion of multilateral frameworks extends beyond trade. Diplomatic standoffs over Taiwan, the South China Sea, and technology restrictions have further strained US-China relations. With trust at a historic low, even minor incidents—such as naval encounters or export control disputes—could escalate into broader conflicts, with far-reaching implications for regional stability.
“The new era will be more volatile, with more frequent and unpredictable shocks. We must be ready to stand firm and protect our interests, no matter how the external winds may blow.”
America's tariff efforts stem from a belief that the US gave up too much in allowing China to join the WTO, and that China competes unfairly by massively subsidizing its own enterprises and limiting market access to US firms, according to PM Wong.
This sentiment is not limited to the US. The European Union has also launched investigations into Chinese subsidies for electric vehicles and wind turbines, signaling a broader Western pushback against perceived market distortions. However, unlike the US, the EU has so far favored targeted tariffs over sweeping measures, reflecting internal divisions over how aggressively to confront Beijing.
People from hollowed-out towns in what was once America's bustling industrial belt may have such beliefs, since jobs have fled and wages have stagnated. "They believe that the American economy is fundamentally broken," PM Wong stated, stressing that the US continues to have unrivaled economic clout in general. However, he stated that America's issues should be addressed within the framework of the World Trade Organisation.
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