APEC Warns of Stagnant Trade Growth Due to Trump Tariffs

In a significant development, the Asia-Pacific Economic Cooperation (APEC) organization has issued a stark warning regarding the impact of tariffs imposed by the Trump administration. The organization has forecasted that trade growth in the Asia-Pacific region will nearly stagnate this year due to the escalating trade tensions.

During the APEC Trade Ministers' Meeting held in Jeju, South Korea, the organization released a regional trends analysis report. The report predicts that the region's merchandise exports, which grew by 5.7% last year, will only increase by 0.4% this year. Similarly, the region's merchandise imports, which grew by 4.3% last year, are expected to increase by a mere 0.1% this year.

APEC has also revised its economic growth forecast for the region from 3.3% to 2.6% for this year. The organization attributes this slowdown to the uncertainty in trade policies, which has surged to a multi-year high since the Trump administration took office. The statement from APEC highlights that the decline in external demand, particularly for manufactured goods and consumer products, will significantly reduce trade growth in the region. Additionally, the increasing uncertainty surrounding trade measures is putting pressure on service trade.

APEC comprises 21 member economies, accounting for approximately half of the global trade volume and 60% of the global GDP. The Trump administration's tariffs target more than half of the APEC member economies. Since APEC's formal establishment in 1989, the average tariff rate in the region has decreased from 17% to 5.3%, leading to a more than ninefold increase in merchandise trade.

Over the next two days, trade representatives from APEC member economies will discuss multilateral trade and other cooperation agendas, including the reform of the World Trade Organization in the face of current challenges. Meanwhile, the United States Trade Representative, Jamieson Greer, is scheduled to hold bilateral talks with the Korean trade representative and conduct the first face-to-face meetings with representatives from New Zealand and other Asian countries.

Greer, before departing for Jeju Island, stated, "We are moving as quickly as possible with those who are ambitious." The APEC meeting underscores the urgent need for cooperation and reform in the face of escalating trade tensions and the potential impact on global trade dynamics. The organization's warning serves as a call to action for member economies to address the challenges posed by the Trump administration's tariffs and work towards a more stable and predictable trade environment.