APEC sounds alarm on sluggish trade growth amid escalating US tariff pressure

Trade ministers from 21 Asia-Pacific nations kicked off a crucial summit on Thursday, only to be greeted by a sobering economic outlook. The Asia-Pacific Economic Cooperation (APEC) forum warned that regional exports will see near-stagnant growth in 2025, a direct consequence of the sweeping tariffs reimposed under former US President Donald Trump’s trade policy revival.

According to APEC’s latest regional trends analysis, exports among member economies are projected to rise by just 0.4 per cent this year, a steep decline from the 5.7 per cent growth recorded in 2024. Regional GDP is also forecast to grow at a sluggish 2.6 per cent, revised down from the previous estimate of 3.3 per cent, as reported by Reuters.

“Trade growth is set to decline sharply across APEC due to lower external demand, particularly in manufacturing and consumer goods, while rising uncertainty over goods-related measures weighs on services trade,” APEC said in an official statement, as quoted by Reuters.

The Trump tariff effect

The downturn in trade coincides with the revival of tariff policies by the Trump administration, which has targeted more than half of APEC’s member nations. Since the forum’s inception in 1989, regional average tariff rates had dropped from 17 per cent to 5.3 per cent by 2021, contributing to a more than nine-fold increase in merchandise trade. However, Trump’s recent tariff reinstatements threaten to reverse decades of economic integration.

“We’re moving as quickly as we possibly can with folks who want to be ambitious,” US Trade Representative Jamieson Greer told CNBC before departing for Jeju, declining further comment on his bilateral meeting schedule, Reuters reported.

The tariff measures have already triggered visible shifts in trade flows and investor sentiment. Economists warn that if the US continues its protectionist stance, sectors such as manufacturing, electronics, and consumer goods could face long-term disruptions.

Meanwhile, China’s Vice Commerce Minister Li Chenggang also attended the gathering. Although Reuters reports that no formal meeting with Greer has been confirmed, both sides had agreed to reduce steep tariffs during their initial face-to-face talks in Geneva on 10–11 May.

WTO reform & bilateral deals

The Jeju summit is also being viewed as a staging ground for broader discussions on World Trade Organization (WTO) reforms, a hot-button issue after Washington recently moved to pause US funding to the institution. The Trump administration has long accused the WTO of enabling China’s rise through what it terms “unfair export advantages.”

Trade representatives are holding bilateral discussions on the sidelines of the summit, which forms part of the lead-up to the APEC leaders’ summit later this year in Gyeongju, South Korea.

APEC, which accounts for 60 per cent of global GDP and half of global trade, remains a key pillar of global economic stability. But with tariff battles heating up and multilateralism on the defensive, the forum faces one of its most pivotal chapters yet.