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Finance & Economics

Briefing

1. Introduction2. Macroeconomy3. Currency & Banking4. Trade & Exposure5. Domestic Market6. Investment Climate
SourcesAbout
Cargo ships in the Singapore Strait

Section 4 of 6

Trade Structure, External Exposure and Global Integration

Singapore is a diversified hub whose trade is now riding an AI electronics boom. Vietnam's trade is growing faster but is driven by foreign-invested firms, relies on the US market and is exposed to US tariff swings.

Next: Domestic Market

How much they trade

Both are trading at record pace in 2026. Singapore's exports are surging; Vietnam's imports are outrunning its exports.

Singapore

S$1.4tngoods trade, 2025

Up 8.7% on 2024.

  • 2026 is faster still: exports up 49.2% and imports 39.3% in August alone, year on year.
  • What’s driving it: electronics exports up 131.8%, on AI-related demand.
  • The mix: machinery and transport equipment make up about 69% of non-oil exports.

Vietnam

US$930bngoods trade, 2025

A record, with a US$20bn surplus.

  • 2026 has flipped: exports up 22.4% but imports up 35.3% through August.
  • The result: a US$23.5bn deficit by mid-September, the largest in 30 years.
  • Where it sits: domestic firms run the deficit; foreign-invested firms still run a surplus.

Who they trade with

Singapore's top four partners are close in size. Vietnam sells mostly to the US and buys mostly from China.

Singapore

Total trade by partner, 2025, S$ billions
  • Taiwan170.3
  • Mainland China162.9
  • Malaysia145.0
  • United States139.2

Taiwan overtook China as the top partner in 2025. No single market dominates.

Vietnam

Exports by market, first half of 2026, US$ billions
  • United States86.5
  • China37.9
  • Japan14.8

The US takes about a third of exports. On imports, China supplied US$138.6bn through August and South Korea US$60.1bn.

Two trade models

Singapore earns as a hub and a services centre. Vietnam earns by assembling for foreign firms, and its own companies are falling behind.

SingaporeVietnam
The main engine
Singapore: 71%Share of non-oil exports that are re-exports, 2025
Vietnam: 77.3%Share of exports made by foreign-invested firms, 2025
The second engine
Singapore: S$533.7bnServices exports in 2024, a surplus of about S$46bn
Vietnam: US$108bnExports by domestic firms in 2025, down 6.1%
Where it is heading
Singapore: 136%Services trade as a share of GDP in 2024, up from 102% in 2014
Vietnam: 18%Share of small firms in supply chains in 2023, down from 35% in 2009

Trade agreements

Both are in the region's big deals. Singapore's network is wider; Vietnam's can't replace the US market.

Singapore

29free trade agreements in force

Including CPTPP, RCEP and the EU–Singapore FTA.

  • The hedge is the network, not any single deal: it spreads exposure across many markets.

Vietnam

18FTAs, in force and planned

Including CPTPP (2019), RCEP (2022) and the EU–Vietnam FTA (2020).

  • RCEP alone covers about 30% of the world’s people and output.
  • A buffer, not a replacement: no agreement matches the scale of the US market.

The US tariff risk

Both now face the same new 12.5% US duty. Vietnam has far more at stake.

Singapore

12.5%extra US duty from 24 July 2026

Part of a forced-labour action covering 60 economies.

  • Exposed: about a third of domestic exports to the US, S$9.5bn a year, roughly 3% of domestic exports globally.
  • So far: MTI calls the impact muted.

Vietnam

12.5%extra US duty from 24 July 2026

The same flat Section 301 rate.

  • Before that: a 20% reciprocal tariff from August 2025, cut to 10% in February 2026 after a Supreme Court ruling.
  • Still contested: 25 US states are suing over the new duty.
  • At stake: US$137bn of two-way trade through August, up 23.4%.

Where supply chains could break

Singapore's risks are chokepoints and inputs. Vietnam's growth rests on firms that moved from China.

Light breaking through clouds over Pasir Panjang Container Terminal, Singapore

Singapore

  • Sea lanes: Singapore, Malaysia and Indonesia pledged in August to keep the Malacca and Singapore Straits open.
  • Helium: under half of Singapore’s chip fabs recycle it, vs 70%+ in Japan and Taiwan.
  • Resilience: 23% of firms could run four to six months through a shock, vs 13% globally.
  • Planning ahead: a first-of-its-kind essential-supplies pact with New Zealand took effect in July.
Aerial view of an industrial park in Thu Dau Mot, Binh Duong, Vietnam

Vietnam

  • China+1: Chinese-owned firms account for a disproportionate share of the export boom to the US.
  • Still tied to China: those firms keep sourcing their inputs there.
  • Moving up: a national chip strategy offers up to 50% subsidies for semiconductor R&D centres.
  • Handle with care: the shift may owe as much to trade tensions as to lasting advantage.

What it means for a company

Cargo ships in the Singapore Strait

Singapore

Truly diversified: many partners, 29 trade agreements, and a real AI electronics upcycle.

Watch chokepoints and critical inputs such as helium, and the new 12.5% US duty, which has had a muted impact so far.
Container barges on the Saigon River with the Ho Chi Minh City skyline at dusk

Vietnam

Fast, foreign-investor-driven growth with heavy reliance on the US market.

Price in US tariff swings. Capital markets are opening: the FTSE upgrade could draw US$6bn over time, and SSI expects US$10bn within a year.