APEC Warns of Sharp Slowdown Amid Trade Tensions

APEC economies are projected to experience a sharp slowdown in 2025, with GDP growth expected to fall to 2.6%, down from 3.6% in 2024, as escalating trade tensions and rising protectionism weigh on the region. Export growth is forecast to plummet to 0.4% from 5.7% the previous year, due largely to U.S. tariffs and other restrictive policies that have severely impacted trade flows and business confidence. Trade policy volatility in April reached levels nine times higher than the decade’s average, amplifying risks for the trade-dependent region. Policymakers and trade ministers are convening to discuss World Trade Organization reforms and stress the need for structural reforms and greater cooperation. Businesses are delaying investments and new product launches, raising fears about negative effects on employment and long-term economic prospects. The proliferation of restrictive measures continues to undermine efforts to facilitate trade, making the outlook for regional and global trade increasingly fragile.