Singapore exports about S$4 billion (US$3.10 billion) of pharmaceutical products to the US and most of these exports are branded drugs, Gan, who is also trade minister, told reporters.

US President Donald Trump announced on Thursday 100% duties on imports of branded drugs that would apply to firms unless they build a manufacturing presence in the US.

This is a concern for Singapore as pharmaceuticals form around 13% of all Singapore exports to the US, said Gan.

He said that many of the pharmaceutical firms in Singapore have existing plans to expand or build their business footprint in the US, which may qualify them for a tariff exemption.

Gan, who met US commerce secretary Howard Lutnick in August, said trade talks with the US are ongoing, with officials on both sides working on details of possible deals for the pharmaceutical and semiconductor sectors.

“Ultimately, we hope to be able to have an arrangement with the US to allow us to continue to be competitive in the US market, to allow our pharmaceutical companies to be able to continue to export to the US market. As to whether the tariff rate will be 15% or any other tariff is something that is part and parcel of the negotiation, but we do look forward to having some preferential treatment versus the current top-line tariff the US has imposed,” said Gan.

Singapore’s exports to the US are subject to a 10% baseline tariff despite a free trade agreement in place with the island nation since 2004.

Broader sectoral tariffs could hurt demand for Singaporean products, including semiconductors, consumer electronics and pharmaceutical goods, which the central bank in July said account for about 40% of exports to the US.

The effective US tariff rate on Singapore’s exports rose to 7.8% in July from 6.8% in April on the back of steel and aluminium tariff hikes.