Background and Triggering Event
On February 20, 2026, the US Supreme Court ruled 6–3 that President Trump’s IEEPA-based “Liberation Day” tariffs were unconstitutional, stripping the executive branch of its broadest unilateral tariff authority. Within 24 hours, Trump escalated by imposing a flat 15% global tariff under Section 122 of the 1974 Trade Act. TheFinance.sg This recalibration reset the global trade landscape significantly: China’s previously punishing 34–50% tariffs were effectively reset to 15%, India’s ~25% tariffs dropped to 15%, the UK lost its negotiated 10% preferential deal, and ASEAN manufacturers received temporary relative relief. TheFinance.sg
Singapore’s Deputy Prime Minister Gan Kim Yong said on February 22 that the government would engage US counterparts to seek clarity on the implementation of the potential new 15% tariff. The Star
Market Response: Measured Resilience
The Singapore stock market appeared largely unruffled. The STI was up 0.3% at the midday break, briefly dipping below its previous close at open, before closing at 5,041.33 — an increase of 23.73 points, or 0.5%. The Star
Regionally, the picture was broadly constructive. Hong Kong’s Hang Seng gained 2.5%, South Korea’s Kospi was up 0.7%, and the FTSE Bursa Malaysia KLCI advanced 0.3%. Japan’s Nikkei 225 was not trading. Chinapulse
Why Singapore Did Not Panic: Structural Explanations
1. Relative Tariff Relief for Asia
Eastspring Investment analysts noted in a report that the court’s ruling is ultimately beneficial for Asia, as it should make arbitrary imposition of tariffs by the US President more difficult. It also establishes a precedent for challenging tariff justification under law. The Star For Singapore specifically, the uniform 15% rate represents a predictable, if elevated, trading environment compared to the uncertainty of the prior regime.
2. Macroeconomic Buffers
Singapore entered this shock from a position of domestic strength. Core inflation fell to 1.0% year-on-year in January 2026, down from 1.2% in December 2025 — reducing the likelihood of monetary tightening by the Monetary Authority of Singapore (MAS) and supporting domestic consumption and investment.
3. Safe-Haven Capital Flows
DBS pointed to cumulative net buying of approximately US$2.3 billion into Singapore equities during the first eleven months of 2025 from passive and active funds, reinforcing the “safe-haven” narrative. TS2 These structural inflows provided a liquidity cushion against sharp risk-off moves.
4. Analyst Interpretation of Legal Constraints
Morningstar’s director of equity research for Asia, Lorraine Tan, anticipated a muted market reaction because limited changes were expected to agreements already in place. Rystad Energy’s chief economist characterised the outcome as “not a reversal of protectionism, but a narrower, more legally constrained US tariff regime.” The Star
Corporate-Level Dynamics
Three stocks illustrated divergent micro-level responses to the macro backdrop:
Raffles Medical Group (BSL.SI, +~4%): The healthcare defensive delivered strong H2 2025 results, with profit attributable to owners rising 22% to SG$38.5 million from SG$31.6 million a year earlier. Healthcare’s insulation from trade tariffs made it a natural beneficiary of risk-rotation on a day of trade uncertainty.
Wilton Resources (5F7.SI, +11%): The surge was idiosyncratic rather than macro-driven. Its subsidiary sold 200 million shares in PT Wilton Makmur Indonesia via off-market transactions, generating a corporate event catalyst entirely decoupled from the tariff narrative.
KTMG / XCF.SI (-6%): The integrated textile and apparel manufacturer was among the more trade-exposed names, warning of a loss for H2 2025 and the full year — a reminder that tariff sensitivity is highly sector-specific within the Singapore market.
Structural Vulnerabilities and Forward Risks
DBS economists had already anticipated that Singapore’s 4.0% GDP growth in 2025 would moderate to 1.8% in 2026, with the “2Ts” — tariffs and the tech cycle — as the critical headwinds. The technology sector faces risks from a maturing electronics upcycle, potential waning of AI momentum, and threatened US semiconductor tariffs. SGinvestors
The 15% uniform tariff also carries sector-specific risks. Singapore’s electronics and pharmaceutical exports — two of its largest trade categories — could face increased costs on US-bound shipments, though initial sectoral exclusions offered some near-term relief.
Eastspring analysts cautioned that although there is a “reasonable chance” overall tariff rates will fall later in 2026, rates on specific sectors and products may still rise. The Star
Conclusions
The February 23, 2026 session presents a textbook case of how a small, open, trade-dependent economy can exhibit market resilience in the face of exogenous trade shocks when several conditions align: declining domestic inflation, strong prior capital inflows, a legal reconfiguration that caps the maximum severity of the shock, and a diversified corporate base with significant exposure to domestically-driven sectors such as healthcare, finance, and REITs. Singapore’s STI, by that date already at 5,041 — well above analyst consensus targets set at the start of the year — reflected a market that had re-rated substantially in 2025 and was digesting the new tariff regime with pragmatic, rather than panicked, recalibration.