APEC trade growth to decline amid escalating trade tension
‘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.’
In a news alert, Carlos Kuriyama, Director, Asia-Pacific Economic Policy Support Unit, said, ‘From tariff hikes and retaliatory measures to the suspension of trade facilitation procedures and the proliferation of non-tariff barriers, we are witnessing an environment that is not conducive to trade.’
Photograph courtesy of APEC
Trade and economic activity in the Asia-Pacific Economic Cooperation (APEC) region has slowed considerably amid escalating trade tensions and rising policy uncertainties, with export and import volumes projected to grow by only 0.4 percent and 0.1 percent, respectively, this year, according to the latest APEC Regional Trends Analysis.
This marks a steep decline from 2024, when export volume grew by 5.7 percent and import volume rose 4.3 percent.
“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,” the report said.
It said efforts to facilitate trade are offset by the proliferation of trade restrictions and frictions, while non-tariff measures, especially subsidies, are on the rise.
APEC economic growth
Economic growth in the APEC region is also forecast to moderate to 2.6 percent and 2.7 percent in 2025 and 2026, a sharp drop from the 3.6 percent growth recorded in 2024, it added.
In a news alert, APEC Policy Support Unit Director Carlos Kuriyama said, “From tariff hikes and retaliatory measures to the suspension of trade facilitation procedures and the proliferation of non-tariff barriers, we are witnessing an environment that is not conducive to trade.”
Uncertainty hurting business
“This uncertainty is hurting business confidence and leading many firms to delay investments and new product launches until the situation becomes more predictable,” he said.
Kuriyama said rising protectionist moves and unfair trade practices, such as increased subsidies, have created an environment where firms are pausing decisions and holding back on cross-border activities.
He added restoring confidence in trade requires not only easing tensions, but also expanding into new markets, strengthening supply chain resilience and improving transparency of trade rules and procedures.
Unlocking economic opportunities
The report said de-escalating trade tensions, reducing policy uncertainty, and promoting trade diversification can unlock economic opportunities.
It also identified upside opportunities amid headwinds, which include services trade, innovative technologies, and growth-enhancing reforms.