Daijiworld Media Network- New Delhi
New Delhi, May 15: The Asia-Pacific Economic Cooperation (APEC) has issued a cautionary note to its 21 member economies, forecasting a dramatic slowdown in regional trade this year — a direct consequence of escalating tariff tensions led by the United States.
In its latest Regional Trends Analysis, APEC reported that trade growth in the region is projected to shrink sharply to just 0.4% in 2025, a steep decline from the 5.7% growth seen in 2024. Alongside, the forum also downgraded its economic growth outlook to 2.6%, down from 3.3% in the previous year.
“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 trade turbulence follows a spate of broad tariffs imposed by the US administration, affecting more than half of APEC’s member nations. These new levies threaten to undo decades of regional integration and tariff reduction. Since 1989, average tariffs in the APEC bloc had plummeted from 17% to just 5.3% by 2021, leading to a nine-fold increase in merchandise trade over the years.
As member nations grapple with the looming challenges, APEC ministers have convened for a crucial two-day summit beginning Thursday. The agenda includes multilateral trade discussions, deeper cooperation, and reform proposals for the World Trade Organization (WTO), which has recently drawn fire from the US.
Washington has accused the WTO of favouring China and has suspended funding to the organisation — a move that has further strained global trade diplomacy. Notably, China’s Vice Commerce Minister Li Chenggang, who is attending the summit, had previously met with former US trade official Jamieson Greer in Geneva, where both sides agreed to temporarily reduce reciprocal tariffs for 90 days. However, it remains unclear whether the two will hold further talks in Jeju.
This ministerial meet is part of a series of dialogues ahead of a high-level APEC leaders’ summit scheduled later this year in Gyeongju, South Korea. The stakes are high, as APEC nations collectively account for around 50% of global trade and 60% of the world’s GDP.
With mounting economic uncertainties and protectionist tendencies on the rise, experts believe the outcome of this week's negotiations could decisively shape the future of trade in the Asia-Pacific region.