The United States, as the world’s largest economy, significantly influences global financial trends. The policies enacted by US presidents can have far-reaching effects, impacting international markets and businesses, including those in Singapore. Over time, the economy under US presidents has experienced booms, recessions, and policy shifts—all of which influence international markets.
For businesses in Singapore, especially SMEs that rely on trade and investment flows, understanding how US presidents affect the economy is key to anticipating market changes and preparing for risks and opportunities.
April 2025 Update: Current US President and Economic Outlook
As of April 2025, President Donald Trump is serving his second term as the 47th President of the United States. His administration has introduced significant economic policies aimed at reshaping trade relationships and bolstering domestic industries.
Recent initiatives include:
- Imposing a 10% baseline tariff on all imports, with higher rates for countries with significant trade deficits with the US.
- Launching investigations into the national security implications of importing computer chips and pharmaceuticals, potentially leading to further tariffs.
- Considering exemptions for certain sectors, such as automotive and consumer electronics, to mitigate domestic economic impacts.
These policy directions have potential ripple effects on global trade and capital flows, particularly in economies closely linked to the US, like Singapore.
1. Changes in fiscal policies
US presidents can shape the economy through fiscal policies like taxation and government spending. Expansionary policies tend to stimulate growth, while austerity can slow it.
President Trump’s administration has proposed significant tax reforms, including extending the 2017 Tax Cuts and Jobs Act, which could decrease federal tax revenue by $4.5 trillion from 2025 through 2034.
For Singaporean businesses, strong US growth driven by increased spending may result in higher demand for exports. In contrast, reduced US consumer spending can affect Singapore-based exporters.
Increased US government borrowing can also lead to higher interest rates and a stronger US dollar, making imports from the US more expensive for Singaporean companies.
2. Trade policies and tariffs
Trade policy is one of the most visible ways US presidents impact global markets. The Trump administration has adopted a protectionist stance, implementing tariffs on imports from various countries.
Notably, a 25% tariff has been imposed on all goods from Mexico and Canada, with certain exemptions for Canadian oil and energy exports. Additionally, US tariffs on Chinese imports have been increased to 145%.
Singapore, being a trade-dependent economy, may experience indirect effects from these policies, such as increased costs for imported goods and potential shifts in trade routes.
3. Crisis management and global impact
The way a US president handles economic crises can have worldwide effects. Significant crises, such as the 2008 financial meltdown or the COVID-19 pandemic, required strong economic responses. A president who implements effective policies can stabilise markets and restore investor confidence, while poor decisions can prolong economic downturns.
For Singaporean SMEs, US crisis management affects global supply chains, investment flows, and demand. In response to global economic uncertainties, the Trump administration has focused on strengthening domestic industries and reducing reliance on foreign supply chains. While this approach aims to bolster the US economy, it may lead to decreased international cooperation and potential volatility in global markets.
Singaporean SMEs should monitor these developments closely, as changes in US economic stability can influence global demand and investment flows.
4. Job creation and unemployment
The US president’s policies encourage business investments and job growth, which can increase household incomes and consumer spending in the US. As a result, the demand for imported goods and services brings potential opportunities for technology, finance, and manufacturing in Singapore. However, high unemployment rates in the US affect consumer spending and hurt Singaporean businesses that cater to the US market.
Additionally, if a US president implements stricter immigration policies or changes labour laws, it could affect Singapore’s talent pool and recruitment opportunities for companies that hire foreign talent, including US professionals.
5. Stock market reactions
The stock market reacts to a US president’s policies, particularly in areas like taxation, regulation, and trade. A strong US stock market attracts global investors, encourages investment in Singapore and helps local companies raise funds. Conversely, market instability can reduce investor confidence, making it harder for businesses to access capital.
US stock markets have shown mixed reactions to the administration’s policies. While tax cuts and deregulation have boosted investor confidence, trade tensions and geopolitical uncertainties have introduced volatility.
Singapore’s financial markets, closely linked to global trends, may experience fluctuations in response to US market movements.
6. Inflation and interest rates
A US president’s government spending, taxation, and trade policies can impact inflation. High inflation can reduce purchasing power and drive up interest rates. How does this rate affect Singaporean SMEs?
In short, higher rates lead to increased US raw materials costs. Simultaneously, it can increase the US dollar exchange rate, so Singaporean businesses require more money to import US products. Meanwhile, low inflation can stabilise costs and create a more predictable business environment.
The combination of fiscal stimulus and trade tariffs has contributed to rising inflation in the US. In response, the Federal Reserve may adjust interest rates, influencing global borrowing costs.
For Singaporean SMEs, higher US interest rates could lead to increased financing costs and affect currency exchange rates, impacting both imports and exports.
Why Businesses Should Track US Presidents and Economic Policy
While US presidents hold significant influence, they are not the sole drivers of economic change. External factors like global demand, supply chain disruptions, and geopolitical tensions also shape the economic landscape.
Still, tracking the economy under US presidents helps Singaporean SMEs stay prepared. By understanding how different administrations approach trade, inflation, and fiscal stimulus, business owners can anticipate shifts, adapt faster, and spot growth opportunities in changing times.
