SINGAPORE - Singapore's trade minister said on Wednesday that he cannot rule out a recession for the local economy this year following US President Donald Trump's trade war, as he announced a taskforce to help businesses and workers address challenges.

Trade minister Gan Kim Yong, also the deputy prime minister, said at a press conference that companies in Singapore have already been affected by the trade war between the US and China and warned of a further global economic impact if Trump were to put additional tariffs on semiconductor and pharmaceutical industries.

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"Given potential downside risks, we cannot rule out the possibility of a recession this year," said Gan.

"Those who have manufacturing operations in China or sell to manufacturers in China for onward sales to the US are already seeing cancelled orders or deferred orders."

Singapore on Monday downgraded its GDP forecast for 2025 to 0 percent to 2 percent from the previous 1 percent to 3 percent after preliminary estimates showed the economy contracted in the first quarter.

Separately on Wednesday, Prime Minister Lawrence Wong delivered a lecture saying there was little comfort in the US postponing most of its proposed "reciprocal" tariffs since the changes had already created great uncertainty around the world.

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"No company can comfortably plan long-term investments while knowing that the tariff rates could be changed at a moment's notice," Wong said.

Singapore faces tariffs on US imports of 10 percent.

Gan chairs the economic taskforce of eight members including ministers, civil servants from various ministries and representatives from business associations and the labour union.

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The taskforce will assess the impact of new developments, address challenges that arise, and develop long term strategies and responses.

Amid the deteriorating outlook, Singapore will go to the polls on May 3. It will be the first electoral test for Wong, who took over from long-time premier Lee Hsien Loong as leader of the People's Action Party (PAP) in May 2024.