Editor's note: Warwick Powell is an Adjunct Professor at Queensland University of Technology. He’s also working at the intersection of China, digital technologies, supply chains, financial flows and global political economy & governance. The article reflects the author's opinions and not necessarily the views of China Up Close.
In the shadow of ancient Korean temples in Gyeongju, the Asia-Pacific Economic Cooperation (APEC) forum convenes its 2025 summit this October/November, a gathering that once symbolized the triumph of open markets and cross-Pacific unity. Founded in 1989 amid the euphoria of the Cold War’s end, APEC was envisioned as a pragmatic antidote to rigid trade blocs, promoting voluntary cooperation among 21 diverse economies - from the emerging powerhouse China to island nations like Papua New Guinea. Champions like Australia’s Bob Hawke and Paul Keating subsequently, and Japan’s Noboru Takeshita, saw it as a vehicle for mutual economic benefit, fostering trade liberalization without the binding constraints of institutions like the European Union. Over the decades, APEC delivered solid results. These included tariff reductions accelerated by the 1994 Bogor Goals tripled intra-regional trade to $8.7 trillion by 2019, while initiatives like the APEC Business Travel Card eased cross-border commerce since 2001.
Yet, as leaders assemble under South Korea’s theme of “Building a Sustainable Tomorrow,” the forum’s aspirations feel increasingly fraught, if not hollow. Geopolitical rifts, protectionist surges, and the persistence of bloc political alignments have transformed APEC from a bridge across the Pacific into a fractured arena, where consensus is elusive and irrelevance looms. In this moment of conjuncture - to borrow from historian Fernand Braudel - short-term crises collide, testing whether APEC can endure the longue durée of shifting global power.
The United States’ waning commitment to multilateralism stands as the most glaring fracture. Once APEC’s de facto steward, Washington now views such forums through the lens of “America First” skepticism, amplified under President Donald Trump’s second term. Since January 2025, the administration has reimposed sweeping tariffs and prioritized attempts to strike bilateral deals, echoing Trump’s first-term withdrawal from the Trans-Pacific Partnership (TPP). At the IMF’s April 2025 meetings, Treasury Secretary Scott Bessent conditioned U.S. support for global institutions on “reciprocal benefits,” a thinly veiled demand for concessions favoring American industries. This retreat is quantifiable. The 2025 Multilateralism Index from the International Peace Institute shows a decline in U.S. engagement across trade forums, even as others ramp up participation. For APEC, this means diluted influence; Trump’s in-person attendance in Gyeongju - his first as president - comes amid domestic pressures to revive U.S. manufacturing, sidelining regional pledges. His August 2025 summit with South Korean President Lee Jae-myung focused on bilateral tech transfers and attempts to impose investment commitments from South Korea to the U.S. rather than any substantial discussions around APEC-wide integration. The forum’s 2025 priorities - AI governance, demographic resilience, and green transitions - risk becoming peripheral, vetoed by a U.S. more inclined to unilateral action than collective strategy, with limited interest to green transitions (after all, Trump has described climate change as a “hoax”) and little signs of a willingness to abandon AI unilateralism.
At the heart of this disarray lies the U.S.-China trade war, a conflict that has metastasized into a regional malaise. Reignited in February 2025 via the International Emergency Economic Powers Act, U.S. tariffs now exceed 10% on over half of APEC members, with China facing 50-100% duties on sectors like electric vehicles and semiconductors. Beijing’s countermeasures have disrupted supply chains as businesses rerouted product channels, fast-tracked imports to avoid impending tariffs, or abandoned trade altogether. APEC’s May 2025 trade ministers’ meeting in Jeju forecasted regional export growth plummeting to 0.4% for the year, down from 5.7% in 2024, blaming “fundamental challenges” from protectionism. In Gyeongju, expect debates on WTO reforms, where the U.S. calls for “market reciprocity” to clash with China’s advocacy for developing-nation exemptions, mirroring the forum’s 2023 failures in San Francisco.
Compounding these tensions are bilateral rivalries that erode APEC’s cohesion. The forum’s inclusive membership now amplifies disputes into multilateral static. South China Sea clashes pit the Philippines against China, with Manila’s enhanced U.S. alliances raising regional tensions. The Diaoyu Dao is another focal point of regional bilateral tensions, straining Tokyo’s role as a U.S. partner. Even semi-neutral players like Singapore are confronting real challenges. ASEAN’s 2025 growth forecast dropped 0.5% due to disrupted trade routes and tourism. North American frictions add to the mix, with Canada and Mexico navigating USMCA renegotiations amid Trump’s assorted tariffs. Collectively, these spats have spawned 345 new trade restrictions across APEC by October 2025, the highest in a decade, per the Jeju statement. Such fragmentation undermines APEC’s role as a strategic canvass for economic alignment, turning it into a venue for grievance airing rather than resolution.
Washington’s pivot to “minilaterals” - smaller coalitions - further fragments the landscape, positioning them as bulwarks against China. Groups like the Quad (U.S., Japan, India, Australia), AUKUS (U.S., UK, Australia), and the U.S.-Japan-Philippines trilateral form a “security latticework,” with exercises like Balikatan expanding; all of which raises the heat in the region. These minilaterals drain APEC’s vitality. The Quad’s August 2025 supply-chain accord bypassed forum-wide digital trade discussions, leaving APEC’s innovation agenda underfunded. For host South Korea, this splinters the summit’s “connect, innovate, prosper” ethos, reducing it to parallel dialogues rather than unified action.
External shadows deepen the gloom. The Russia-Ukraine conflict’s ripples - global food inflation at 8% above pre-2022 levels - batter APEC’s vulnerable economies, with rice prices surging 12% in Indonesia and Peru during Q3 2025. Meanwhile, BRICS - expanded to include Indonesia, Egypt, and others - emerges as a parallel forum - if not a functional alternative or rival to APEC, commanding 40% of global GDP (PPP) and advancing currency multipolarity through national currency settlements and the expanded role of the New Development Bank. At its October 2025 summit, BRICS lambasted U.S. tariffs, highlighting a parallel order that overlaps with APEC members like China, Indonesia, Vietnam and Russia, who leverage it to influence forum dynamics.
This conjuncture - a Braudelian tangle of immediate crises - portends struggle for common ground in Gyeongju, much like 2023’s rifts over Ukraine and Gaza. Yet, the longue durée offers hope amid peril. APEC survived the 1997 Asian Financial Crisis by adapting to peer reviews and capacity-building. Today, evolving power balances - China’s ascent, India’s rise, Russia’s re-emergence - could force reinvention. If BRICS eclipses the G7 by 2030, APEC might pivot to multipolarity. Host Lee Jae-myung’s “pragmatic flexibility” - balancing U.S. ties with China outreach - could yield breakthroughs, like a Xi-Trump dialogue easing rare-earth tensions or frameworks for AI ethics and green finance.
Ultimately, APEC’s fate hinges on rediscovering its flexible origins. In a world of zero-sum mentalités, where trust erodes amid 345 restrictions, the forum must evolve beyond ceremony. Gyeongju could plant seeds for revival - modest pacts on sustainability or digital standards - or confirm decline, outshone by minilaterals and blocs. As Braudel reminds us, conjunctures pass, but longue durée endures through adaptation. For APEC, the choice is to reinvent itself as a high-stakes barometer of Pacific cooperation, or fade into irrelevance in a multipolar storm.
About the Author
Warwick Powell is an Adjunct Professor at Queensland University of Technology. He’s also working at the intersection of China, digital technologies, supply chains, financial flows and global political economy & governance.
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I agree except for the part about common sense. For Marx, common sense is not a universal truth, but a social and historical construct shaped by the material and production conditions of a society. It is a form of practical and often uncritical consciousness that legitimizes the existing social order, such as the "bourgeois common sense" that presents capitalism as the most natural thing.
The inverse of tariff is subsidy.
Tariffs imposed by the coercively strong on the weak are subsidies extracted from the weak to the benefit of the strong.
Deindustrialised states wish to restore their industry by subsidies from states which have taken on those industries.
Industrially hollowed out countries seek to “impose investment commitments” on industry-hosting countries as subsidies to their broken or exported industrial enterprises.
To protect nascent or re-emerging enterprises from competitive harm or disadvantage is protectionism.