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 Trump's tariffs upending markets and long-established trade systems.
Experts now expect a meagre 0.4 per cent growth in exports for the Asia-Pacific region this year 鈥� a sharp slowdown from 5.7 per cent in 2024, according to an APEC report released Thursday.
Higher tariffs and retaliatory measures are leading to 鈥榓 loss of investor confidence, weakening demand, and could eventually affect jobs鈥�, Carlos Kuriyama, director of the APEC Policy Support Unit, told a press briefing.
Imports are also projected to remain flat, rising only 0.1 per cent.
As a result, APEC countries are forecast to post just 2.6 per cent GDP growth in 2025, down from an earlier projection of 3.3 per cent, according to new estimates.
Growth in 2026 is expected to reach 2.7 per cent 鈥� well below the 3.3 per cent expected for the rest of the world.
While APEC includes a wide range of economies, all are struggling, Kuriyama said.
In addition to 25 per cent tariffs on automobiles and steel, the Trump administration announced 鈥榬eciprocal鈥� 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.
鈥榃e need to make sure that policies are steady, and if there are some changes, those changes are permanent and not temporary.鈥�
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.
鈥楾his is positive, but this is not taking us to the situation before April鈥�, when Trump unleashed his tariffs, Kuriyama told reporters.
Within APEC, 鈥榤any 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,鈥� he noted.
But the impact is limited.
鈥楾he US is the largest the largest market, it is the largest economy, so it represents a very significant per centage of the global economy,鈥� Kuriyama said.
鈥業t will be hard to find a way to replace all these opportunities.鈥�
