SINGAPORE: The tensions in the Middle East will affect energy prices and impact countries far away, such as Singapore, Senior Minister Lee Hsien Loong said on Saturday (Feb 28).
“Today, Israel and the US together attacked Iran, jointly. The war has begun, Iran has struck back," he said, adding that it would be hard to tell how the war would end.
For weeks, tensions between the US and Iran have been building up, and the US has assembled a “huge military force” in the Middle East, he said.
Mr Lee also pointed to the tariffs imposed by the US administration, which in the past week were ruled illegal by the US Supreme Court.
The US administration invoked another instrument to impose a flat 10 per cent tariff on all countries, and US President Donald Trump changed his mind within a day and raised this to 15 per cent. However, the official US rate is currently still 10 per cent.
“So we are relieved, but I think we have to walk very carefully, and we just have to be prepared that many more changes can happen,” said the senior minister.
The overall climate of uncertainty created by these “dramatic twists and turns” will dampen the global mood for trade and investment, he added.
“Because businesses and companies will find it impossible to plan for what will happen tomorrow, what they can rely on, where they can safely invest, what they should do in order to make sure that the company will be okay the day after tomorrow.
"And this is going to affect us too. As a small and open economy, we rely on global trade and investment."
Mr Lee, who is a Member of Parliament for Ang Mo Kio Group Representation Constituency, was speaking to a crowd of over 1,200 residents at a Chinese New Year celebration dinner at Teck Ghee Community Club.
He is also an adviser to Ang Mo Kio GRC grassroots organisation.
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