Trumps tariffs to trigger stagnant trade in Asia: APEC report

Trumps tariffs to trigger stagnant trade in Asia: APEC report

Asia should brace for a near-stagnation of trade and a sharp economic slowdown in the region this year due to escalating tariffs, experts from the Asia-Pacific Economic Cooperation said Thursday. Trade ministers from the top economies that make up APEC are meeting in South Korea from Thursday as global trade cooperation falters, with US President Donald Trumps tariffs upending markets and long-established trade systems. Experts now expect a meagre 0.4 percent growth in exports for the Asia-Pacific region this year -- a sharp slowdown from 5.7 percent in 2024, according to an APEC report released Thursday. Higher tariffs and retaliatory measures are leading to "a loss of investor confidence, weakening demand, and could eventually affect jobs", Carlos Kuriyama, director of the APEC Policy Support Unit, told a press briefing. Imports are also projected to remain flat, rising only 0.1 percent. As a result, APEC countries are forecast to post just 2.6 percent GDP growth in 2025, down from an earlier projection of 3.3 percent, according to new estimates. Growth in 2026 is expected to reach 2.7 percent -- well below the 3.3 percent expected for the rest of the world. While APEC includes a wide range of economies, all are struggling, Kuriyama said. - Dangerous uncertainty - In addition to 25 percent tariffs on automobiles and steel, the Trump administration announced "reciprocal" tariff surcharges in early April, which have been suspended until July. These higher tariff risks are damaging economic activity, and increased production costs will be passed on to consumers, ultimately reducing demand for goods, Kuriyama said. Uncertainty is dangerous, he added. "We need to make sure that policies are steady, and if there are some changes, those changes are permanent and not temporary." US trade representative Jamieson Greer is attending the summit and has held bilateral talks with attendees, including Chinese international trade representative Li Chenggang. China and the United States recently agreed to a partial pause in their tariff surcharges. "This is positive, but this is not taking us to the situation before April", when Trump unleashed his tariffs, Kuriyama told reporters. Within APEC, "many of the governments are trying to implement measures to facilitate trade in order to offset the negative effect coming from measures that are adding more barriers, more and more constraints," he noted. But the impact is limited. "The US is the largest the largest market, it is the largest economy, so it represents a very significant percentage of the global economy," Kuriyama said. "It will be hard to find a way to replace all these opportunities."