SINGAPORE: To help Singapore companies adapt to the new tariff environment, the government will be launching a Business Adaptation Grant in October, the Singapore Economic Resilience Taskforce (SERT) announced on Thursday (Jul 10).

The grant will be capped at S$100,000 (US$78,000) and will have a co-funding element, said Minister for Manpower Tan See Leng.

Revealing details of the new grant at a SERT press conference, which was held two days after US President Donald Trump started firing off letters on reciprocal tariffs to several countries, Dr Tan said small and medium enterprises will likely be able to receive a higher percentage of co-funding from the government than multinational firms.

Small and medium enterprises employ around two-thirds of Singapore workers, he added.

The grant will cover two categories of businesses and eligible companies will get support for a "time-bound period" of two years. 

The first group includes companies export to or operate in overseas markets and are affected by tariffs, and the second group is companies that need support with reconfiguration costs, including logistics and inventory holding costs.

For the first group, the grant will help them conduct free trade agreements, trade compliance advisory, legal and contractual advisory and supply chain optimisation and market diversification advisory.

More details of the grant will be available later.

The Business Adaptation Grant complements other schemes that help businesses enter new markets, transform, innovate and grow, said Dr Tan, who is also Second Minister for Trade and Industry.

Since the task force was formed in April, it has engaged more than 3,000 people, including business leaders, union leaders, workers and new graduates, said Minister for Digital Development and Information Josephine Teo.

For businesses, she said some are monitoring the situation, while others have decided to defer or hold back major investment decisions, or are reviewing their plans. 

"Companies in the outward oriented sectors, they feel the impact much more imminently, and their plans, therefore will be much more likely to have to be adjusted sooner rather than later," she said.

Chairman of the Singapore Business Federation (SBF) Council Teo Siong Seng said businesses gave feedback that they need to diversify into different markets and reconfigure their supply chain.

"We have raised this concern to SERT," he said. "SBF is...