Singapore is seeking concessions on pharmaceutical exports to the US, acknowledging that a 10 percent baseline tariff will not be eased.

Following a call with US Secretary of Commerce Howard Lutnick on Friday, Singapore Deputy Prime Minister Gan Kim Yong told local media that the Asian trading hub is negotiating with the US over pharmaceutical exports as new levies loom over the drugs.

Gan said the products makes up over 10 percent of the city-state’s exports to the US, the Straits Times reported Sunday.

ALSO READ: Singapore forms 'economic resilience' taskforce amid possible tariff-induced recession

Gan, who is also the country’s trade minister, said Lutnick also raised the issue of export controls on high-end chips for artificial intelligence, although he is satisfied with Singapore’s system for managing them, the paper reported. The issue has drawn renewed scrutiny after authorities arrested multiple people in connection with server fraud.

Lutnick is prepared to work with the city-state to maintain access to the chips and explore export curbs to ensure chips reach authorized end-users, Gan was quoted as saying.

While progress has been made in discussions with the US, said Gan, a lot of negotiations have still to take place before a deal can be struck.

Gan said a timeline for discussions has not been set, but added that Lutnick’s priority is to “keep it simple and see whether we can resolve discussions very quickly”.

ALSO READ: Singapore lowers 2025 GDP forecast amid global trade hit from US tariffs

Gan said in a separate LinkedIn post that despite the negotiations, the US is not prepared to lower its 10 percent baseline tariff. Concerns over a global trade slowdown has already prompted a downgrade in official forecasts for economic growth.

The issue has also become a key campaign issue for Gan’s ruling People’s Action Party, which seeks to extend its six decades in power at polls on May 3.

Gan’s call with Lutnick comes after he had earlier discussed the tariffs and their impact on trade with US Trade Representative Jamieson Greer on April 15.

Greer explained the US’ concern over its overall trade deficit in goods, as well as the US’ priority in strengthening its domestic manufacturing base, Gan wrote in a LinkedIn post.

READ MORE: Singapore PM Wong flags tariff alarm

“He also acknowledged Singapore’s importance as an economic partner and the US’ trade surplus with Singapore, even as we are subject to the 10 percent baseline tariff.”