Exports to See Marginal Growth Amid US Trade Barriers; APEC Revises GDP Forecast
The Asia-Pacific Economic Cooperation (APEC) grouping sounded a warning on May 15 about weakening trade momentum across its 21-member economies, as it forecast a drastic slowdown in export growth and downgraded the region’s economic expansion forecast for 2025. APEC projected that merchandise exports across the bloc would grow by a mere 0.4% this year, a steep drop from 5.7% in 2024, citing US tariffs and trade policy uncertainty as major headwinds. The region’s GDP growth is also expected to decline to 2.6%, down from an earlier estimate of 3.3%, according to the latest Regional Trends Analysis released at the annual trade ministers’ meeting held in Jeju Island, South Korea.
The organization attributed the export slump to reduced external demand, particularly in manufacturing and consumer goods, while services trade remains constrained by policy volatility. “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 stated. The grouping, which includes the US, China, Japan, and several Southeast Asian economies, accounts for approximately 50% of global trade and 60% of global GDP, making its outlook a bellwether for global commerce.
Highlights:
APEC forecasts regional export growth at just 0.4% for 2025, down from 5.7% in 2024.
Regional GDP growth slashed to 2.6%, compared to previous projection of 3.3%.
US tariffs and external demand weakness blamed for sharp decline in trade momentum.
Services trade weighed down by rising regulatory uncertainty.
Trump Tariffs Reignite Trade Tensions as APEC Looks to Reaffirm Multilateralism
The APEC analysis directly links the decline in regional trade dynamism to the reemergence of tariff-centric policies under former US President Donald Trump. Despite a temporary easing in tariff rhetoric during the Biden presidency, Trump’s re-election campaign and his recent comments suggesting expanded tariffs have rekindled concerns among trade officials across Asia-Pacific. According to APEC data, average tariff rates across the bloc fell from 17% in 1989 to 5.3% in 2021, a shift that helped merchandise trade rise more than nine-fold in the period. However, this liberalization trend is now being tested by a resurgence of protectionist measures.
Trump’s stance on dismantling World Trade Organization (WTO) mechanisms that he claims enable China’s dominance in global exports has further aggravated multilateral tensions. The US has already suspended portions of its funding to the WTO and is urging reforms that many APEC members fear may undermine existing trade norms. This backdrop adds urgency to APEC’s push for collaborative frameworks as the group seeks to cushion regional economies from escalating trade disputes.
Highlights:
Trump administration’s tariffs blamed for weakening intra-APEC trade.
Regional average tariffs dropped from 17% (1989) to 5.3% (2021), now under threat.
APEC warns of rollback in trade liberalization and rules-based commerce.
WTO reform emerges as key topic amid US push to restructure multilateral trade norms.
APEC Members Pursue Bilateral Deals Amid Sluggish Progress on Multilateralism
Against this uncertain trade backdrop, APEC members are intensifying bilateral engagements with the United States and each other to salvage trade momentum. US Trade Representative Jamieson Greer arrived in Jeju for bilateral meetings with his South Korean counterpart, following initial trade talks held in Washington, DC, three weeks ago. He is also scheduled to meet with trade ministers from New Zealand, Japan, and other Asia-Pacific countries. While Greer refrained from sharing his complete itinerary, he emphasized before his departure that the US is prioritizing “ambitious” partners willing to engage in proactive trade discussions.
The potential for renewed US-China talks remains a wildcard. China’s Vice Commerce Minister Li Chenggang is also attending the meeting, though there was no official confirmation of whether he would hold a second meeting with Greer, following their tariff-slashing discussions in Geneva earlier this month. The bilateral talks in Jeju come ahead of the second round of senior officials’ meetings leading up to the APEC Leaders’ Summit later this year in Gyeongju, South Korea.
Highlights:
US Trade Representative Greer meeting key Asian counterparts on APEC sidelines.
Bilateral talks with South Korea and New Zealand indicate US outreach.
China’s Vice Commerce Minister Li Chenggang’s participation adds significance.
Eyes on potential follow-up to May 10–11 US-China tariff talks in Geneva.
APEC Seeks to Counter Trade Fragmentation Ahead of Leaders’ Summit
With rising economic nationalism and tariff rhetoric clouding the outlook, APEC is redoubling efforts to restore confidence in multilateral trade governance. The Jeju meeting represents a critical lead-up to the 2025 APEC Leaders’ Summit in Gyeongju, where heads of state are expected to deliberate on reforms to the WTO, regional economic resilience, and digital trade cooperation. While APEC remains a non-binding forum, its platform is seen as critical in guiding consensus-driven responses to trade challenges that affect both emerging and advanced economies in the region.
Highlights:
Jeju trade ministers’ meeting serves as precursor to Gyeongju Leaders’ Summit.
WTO reform, services trade, and economic resilience top agenda.
APEC positions itself as bulwark against rising trade protectionism.
Uncertainty remains over how deeply US and China will engage under APEC’s umbrella.
