APEC warns of tariff impact as China, US reps meet

The Asia-Pacific Economic Co-operation grouping is warning that exports in the region will barely grow in 2025 amid the onset of US tariffs, as the US and Chinese trade representatives meet on the sidelines of the gathering.

The 21-member APEC bloc projects exports in the region will rise by only 0.4 per cent in 2025 compared with 5.7 per cent in 2024, in a regional trends analysis report released at its 2025 meeting of ministers responsible for trade in South Korea's resort island of Jeju.

The bloc also cut its regional economic growth forecast for 2025 to 2.6 per cent from 3.3 per cent previously.

"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," APEC said in a statement.

The Trump administration's sweeping tariffs have targeted more than half of the APEC grouping, where regional average tariff rates fell to 5.3 per cent by 2021, from 17 per cent in 1989, when the non-binding economic forum was established.

Merchandise trade increased more than ninefold during this period.

Still, in a sign of potential further progress to address trade friction between the world's biggest economies, US trade representative Jamieson Greer met Chinese trade envoy Li Chenggang on the sidelines of the gathering, South Korea's Trade Minister Cheong In-kyo told reporters without elaborating.

The meeting comes after Greer and Li agreed to slash steep tariffs at their first face-to-face talks in Geneva on May 10-11.

For two days from Thursday, trade representatives of the member economies will discuss multilateral trade and other co-operation agendas, including reform of the World Trade Organisation amid current challenges.

The Trump administration views the WTO as a body that has enabled China to gain an unfair export advantage and has recently moved to pause US funding to the institution.

As host of the annual conference, South Korea Trade Minister Cheong will highlight how global economy and trade face added strain from uncertainties and will urge the bloc to foster dialogue to tackle political and economic challenges, according to his ministry.

Before the main sessions, APEC policy director, Carlos Kuriyama, attributed the downgrading of the regional export outlook to the impact of US tariffs and warned the reach of their ripple effects is still greater.

"We notice US tariffs are affecting not just goods trade, it's also affecting services trade and financial markets. That's why governments are having trade talks, but they are still not back to before early April," Kuriyama told reporters.

The APEC gathering is being attended by trade ministers and envoys from member countries including Australia, New Zealand, Japan, Canada, Mexico and Russia.

The trade ministers' meeting is being held as part of a second round of senior officials' meetings ahead of an APEC leaders' summit this year in Gyeongju, South Korea.

APEC accounts for about half of global trade and 60 per cent of global GDP.