APEC Sounds Alarm: Trade Slowdown Looms as US Tariffs Impact Global Growth

APEC Warns of Significant Trade Slowdown Due to US Tariffs :

The Asia-Pacific Economic Cooperation (APEC) forum, comprising 21 member nations that represent a significant portion of global trade and GDP, issued a stern warning today regarding an impending slowdown in regional trade. In its latest Regional Trends Analysis report, APEC directly linked the anticipated modest trade growth to the widespread US trade tariffs, signaling potential headwinds for the global economy.  

Modest Growth and Rising Uncertainty

APEC’s report projects a very modest rise in trade of only 0.4 percent this year across its member economies, a stark contrast to the 5.7 percent growth witnessed in 2024. This significant deceleration is attributed primarily to lower external demand, particularly affecting manufacturing and consumer goods sectors. Adding to the concern is the rising uncertainty stemming from goods-related trade measures, which is also weighing heavily on services trade.  

The warning highlights the far-reaching impact of the US administration’s broad tariffs, which are affecting more than half of APEC’s member economies. These measures, according to APEC, threaten to reverse decades of progress in reducing regional tariff rates, which had steadily fallen from 17 percent in 1989 to a mere 5.3 percent by 2021, fostering a nine-fold surge in merchandise trade.  

Implications for Multilateral Trade and WTO Reforms

The APEC trade representatives are currently meeting in a two-day summit to discuss multilateral trade and cooperation agendas. A crucial part of these discussions includes reforms of the World Trade Organization (WTO), which faces significant challenges amid the current protectionist climate. The US has openly criticized the WTO, accusing it of unfair trade advantages to countries like China and has even paused its funding to the organization.  

The presence of China’s Vice Commerce Minister Li Chenggang at the summit, following a recent agreement with US officials to temporarily cut reciprocal tariffs, underscores the complex and fluid nature of current global trade relations. While the 90-day truce between the US and China offers a glimmer of hope, APEC’s warning serves as a reminder that fundamental issues, particularly concerning tariffs and trade policy, continue to cast a shadow over international commerce. The outcomes of these high-level talks will be critical in shaping the future direction of trade, especially in the economically vital Asia-Pacific region.  

Source – Chinadailyasia, Freepressjournal, Yahoo, Bangkokpost