Over 20 economies warn of a slowdown in growth over trade tensions

On Thursday, over 20 economies, including the U.S. and China, warned that their collective growth risks a sharp slowdown due to global trade tensions. The Asia Pacific Economic Cooperation forecasts growth to plummet to 2.6% in 2025 from 3.6% in 2024.

The intergovernmental grouping came when U.S. President Donald Trump’s aggressive trade policies and reciprocal tariffs initiated retaliatory measures from its trade partners. The President has suspended the reciprocal tariffs as trade negotiations continue, but the environment remains uncertain.

21 economies warn of growth slowdown over trade tensions

The Asia Pacific Economic Cooperation, with 21 economies worldwide, including the U.S. and China, cautioned on May 15 that their joint growth risks a sharp slowdown in the wake of tariff tensions and policy uncertainty weighing on investment and trade.

The Asia Pacific Economic Cooperation predicts that growth will drop from 3.6% last year to 2.6% in 2025. 

“From tariff hikes and retaliatory measures to the suspension of trade facilitation procedures and the proliferation of non-tariff barriers, we are witnessing an environment that is not conducive to trade.”

-Carlos Kuriyama, Director of APEC Policy Support Unit.

At a meeting in South Korea, Kuriyama acknowledged that the uncertainty surrounding tariffs was weighing on business confidence. He noted that it led many firms to delay investments and new product launches until the situation turned more predictable.

Kuriyama believes that restoring confidence in trade requires easing tensions and taking actions such as strengthening supply chain perseverance and improving transparency of trade rules and procedures.

Former Canadian trade minister Mary Ng argued that companies, entrepreneurs, and countries are looking for trade deals that offer trading partners a certain predictability for doing business with each other. She served as Canada’s Minister of Export Promotion, International Trade, and Economic Development when Trump imposed 25% levies on steel and aluminum. 

The politician also sought a formal consultation with the U.S. to address tariff-related issues. Ng believes governments owe it to their economies to do their best to create the right conditions for predictability, which businesses can count on and plan accordingly.

Malaysian Trade and Investment Minister Tengku Zafrul Aziz welcomed the recent de-escalation of trade tensions between the U.S. and China and highlighted the importance of dialogue between nations. He noted that Malaysia and other ASEAN countries believe in a rules-based multilateral trading system.

World Trade Organization Director-General Ngozi Okonjo-Iweala also mentioned that dialogue with the U.S. should be conducted to find out why they got where they are and what they can do about it. She cautioned about U.S.-China tensions, saying that if the world separates into two global trading blocs, they could lose 7% of global GDP in the longer term.

U.S. reaches trade agreements with China and the UK

The mainstream media, Democrats, and Trump Deranged critics said he couldn’t strike a deal.

Today, after a historic deal was made with the UK, @realDonaldTrump reached a new agreement with China to open market access for American exports.

— Sen. Marsha Blackburn (@MarshaBlackburn) May 12, 2025

U.S. President Donald Trump agreed with China to reduce tariffs from each nation by 115% by May 14 while retaining an additional 10% tariff. China also agreed to suspend its initial 34% tariff on the U.S., which it announced on April 4 for 90 days, but it will retain a 10% tariff during the pause. 

China also agreed to suspend its non-tariff countermeasures imposed on the U.S. from April 2. The country had issued export restrictions on some rare-earth minerals, placed dozens of U.S. companies on its unreliable entity list, and lost its export control list. It launched an anti-monopoly probe into U.S. chemical giant DuPont.

The U.S. suspended its 34% reciprocal tariff imposed on April 2 for 90 days, but will also retain a 10% tariff during the pause period. Both countries made a joint statement in Geneva, Switzerland, saying they recognize the importance of a sustainable, long-term, mutually beneficial economic and trade relationship.

Trump and the UK’s Prime Minister Keir Starmer reached a deal on May 8, where the UK agreed to reduce numerous non-tariff barriers that unfairly discriminated against American products. According to the agreement, Trump’s reciprocal tariff rate of 10% will still be in effect. 

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