Trump’s unpredictable approach to policy has created a climate of uncertainty across the Asia-Pacific region – Image: Daniel Ceng/Anadolu/picture alliance
For decades, APEC has helped integrate economies along the Pacific Rim. But on-again, off-again tariff escalation between the world’s largest economies means more uncertainty and less room for cooperation.
Donald Trump‘s whirlwind tour of Asia this week culminated in a much-anticipated sit down with Chinese President Xi Jinping on the sidelines of the annual Asia-Pacific Economic Cooperation (APEC) summit hosted this year by South Korea.
So far, details of the meeting have yielded no big surprises. The US will lower tariffs in exchange for China cracking down on chemicals used to make fentanyl. Trump said China would buy “tremendous amounts” of soybeans from the US, after Beijing had cut off purchases amid an escalating trade war.
An “amazing meeting” with Xi concluded, Trump left town before the APEC summit’s main event: the leaders’ meeting on Friday, which Xi is expected to attend. South Korea has planned days of talks around the summit’s theme “building a sustainable tomorrow.”
Whether the latest truce between the US and China will be sustainable remains a question mark.
“US-China relations will remain intensely competitive, and even if a few small deals are reached and the temperature is lowered for a while, countries need to be prepared for renewed friction that could have consequences for their interests,” Bonnie Glaser, managing director of the German Marshal Fund’s Indo-Pacific Program, told DW.
US-China dysfunction overshadows APEC summit – Image: DW.com
A US-China truce, for now
Trump began his second term in office by imposing what he called “reciprocal” tariffs on nearly every country in the world, allies and competitors alike. The tariff rates presented on “Liberation Day” in April defied economic logic, leaving countries wondering how to respond. Since then, many of the tariffs have ended up exempted, rolled back or delayed, complicating long-term planning on sourcing and supply chains.
Competition with China has been at the forefront of US trade policy since Trump’s first term. The scattershot tariffs in April were surprising, partly because they went far beyond what had been expected, namely that Trump would limit aggressive trade policy to China.
However, since Trump’s first term, Beijing has learned to push back. At one point, both sides had threatened tariffs well over 100% before de-escalating. The latest flare-up in October saw Trump renew threats of 100% tariffs after Beijing threatened to restrict the export of high-tech critical rare-earth minerals, a market it dominates.
The commotion almost scuttled plans for the Trump-Xi talks in South Korea, before both sides cooled down.
But despite the current detente, which is said to include a “one-year truce,” the overall economic landscape remains volatile. Trump is known for his unpredictability, such as slapping a 10% tariff on Canada last week over an unflattering TV ad.
“Washington’s tumultuous trade negotiations — from China to India to Korea — have left many of its Asian allies questioning whether the United States still sees economic integration as a strategic asset or a bargaining chip,” Alison Szalwinski, vice president and a China adviser at The Asia Group, a public policy and strategy consultancy, told DW.
Amid this tense geopolitical landscape, forums like APEC will find it more difficult to achieve multilateral outcomes under the current geopolitical climate, Andrew Yeo, senior fellow at the Brookings Institution’s Center for Asia Policy Studies, wrote ahead of Trump’s Asia tour.
This has “contributed to the steady marginalization of summits in favor of using large gatherings like APEC to schedule smaller meetings on the sidelines,” Yeo said.
How APEC helped open up China to the world
The US was a founding member of APEC, launched in 1989 to promote open trade and economic cooperation in the Asia Pacific. The results have been overall lower average tariffs in the region, along with more integrated supply chains and cross-border investment.
China joined APEC in 1991, in its first entry into a multilateral economic organization as part of Beijing’s “reform and opening up” policy launched by Deng Xiaoping in the late 1970s.
Participation in APEC discussions pushed China toward market-oriented reforms, transparency and regulatory modernization, and encouraged liberalized trade and investment policies.
This preceded China’s membership in the World Trade Organization (WTO) in 2001, which helped spark the growth of China’s export machine.
Flash forward to 2025, and APEC host South Korea has listed expected deliverables from the summit to include cooperation on harnessing artificial intelligence among APEC economies in an “inclusive and sustainable manner,” and responding to demographic changes like aging populations and labor shortages.
Big deals on the sidelines
But with the Trump-Xi talks wrapped up and big-ticket deals with Japan and South Korea inked earlier in the week, the summit has already lost some of its luster, with the leader of its largest economy heading home on a plane before the event had even kicked off.
After Trump’s nudging this week during talks with the leaders of South Korea and Japan, both countries agreed to what amounts to a $900 billion (€777 billion) investment in the US economy in exchange for tariff relief, with deals comprising energy, artificial intelligence and critical minerals.
Brookings Asia fellow Patricia Kim wrote that Asian middle powers like South Korea are caught between the US and China.
“They are focused on negotiating trade deals with Washington while managing economic exposure to Beijing. Across the region, governments are hedging rather than leading in an increasingly transactional landscape,” Kim said.
Donald Trump reached big-ticket agreements with Japan and South Korea during his Asia tour – Image: Mark Schiefelbein/AP Photo/picture alliance
US Asian allies hedge amid uncertainty
And while South Korea and Japan make their own deals with Trump, there are signs both countries are hedging against an unreliable US by deepening their trade and security cooperation with other regional partners in the face of more transactional US policies.
“The share of Korean and Japanese exports heading to the US is falling, for example, despite the trade deals that both countries announced with Washington in July. Neither country, however, is looking to multilateral institutions such as the WTO or APEC to resolve its trade negotiations with the US,” Jeremy Chan, a senior analyst for Northeast Asia and China at political risk consultancy Eurasia Group, told DW.
Diplomatic engagement is also picking up between South Korea and Japan. Before meeting Trump for the first time in August, South Korean President Lee Jae-myung met Japan’s then-Prime Minister Ishiba Shigeru in Tokyo.
“Seoul used to consult with Washington before engaging with Tokyo; now the opposite is true, as relations between South Korea and Japan have improved, and both countries face similar challenges in negotiating contentious trade and investment agreements with the US without harming security ties,” Chan said.
At APEC, Lee will hold his first meeting with Japan’s new prime minister, Takaichi Sanae, a conservative who is poised to moderate formerly hawkish foreign policy views on South Korea.
“In a world in which the US is less reliable, Japan and Korea will need each other more, with shuttle diplomacy between Seoul and Tokyo likely to continue,” Chan said.
Szalwinski from The Asia Group said that countries have been hedging for some time by “doubling down on smaller, results-oriented ‘minilateral’ arrangements, oftentimes oriented around more narrow or tangible shared interests.”
What role does APEC now play?
However, in an ever-growing transactional world, big tent groupings like APEC are still needed to provide a forum for dialogue.
Even if Trump did not attend the leaders’ summit itself, and the talks with Xi took place in the city of Busan, away from the main summit site in Gyeongju, APEC did provide a neutral venue for a meeting between the US and China at a critical time.
And the sit-down did lead to tentative steps towards de-escalation, like another round of Trump-Xi talks in Beijing slated in 2026. According to Chinese state news agency Xinhua, during their meeting Xi told Trump that China and the US should not fall into a “vicious cycle of retaliation” against each other.
“Uncertainty is contributing to the general perception, which started several years ago, of eroding confidence in multilateralism, but it’s not necessarily killing it,” Szalwinski said.
India watches from sidelines as APEC kicks off
Analysts say India is more poised towards bilateral deals than joining multilateral organizations like APEC – Image: Kevin Lamarque/REUTERS
India has said in the past it wants to join the multilateral regional economic grouping, but with the US president’s transactional style dominating the landscape, doing one-on-one deals may be preferable for New Delhi.
Leaders are gathering in Gyeongju, South Korea, for the Asia-Pacific Economic Cooperation (APEC) summit, a grouping that promotes trade, investment and economic cooperation among the economies of the Asia-Pacific region.
Before its main event begins on Friday, this year’s summit was already dominated by a meeting on the sidelines Thursday between Donald Trump and Xi Jinping, who agreed to cool trade tensions for the time being.
The meeting capped off a week of Asian diplomacy for Trump, who began his trip at the Association of Southeast Asian Nations (ASEAN) summit in Kuala Lumpur. Indian Prime Minster Narendra Modi decided to skip the ASEAN summit in person, leading to speculation that he wanted to avoid a face-to-face with Trump amid rising US-India tensions over Russian oil purchases.
India has for years eyed joining APEC. Despite the country’s growing economic influence and the support of some member economies, including the US and South Korea, its membership bid has repeatedly faced obstacles.
And Trump’s engagement with Asian partners at summits this week comes amid a cooling phase in India-US ties.
“The US has been supportive of India in the past and successive administrations have supported our case for APEC membership,” Anil Wadhwa, a retired Indian diplomat who has extensive experience in Southeast Asia and the wider Indo-Pacific region, told DW.
Under the second Trump administration, “there is no active outreach to India or for other countries, and therefore, there is a standstill in these efforts,” he added.
Does India still want to join APEC?
When it first expressed an interest in joining, India’s perceived protectionist policies were seen as a significant obstacle. But Wadwa dismisses the suggestion that many APEC economies still view India as too trade defensive and politically cautious for a forum that relies on consensus and open markets.
“India is not protectionist but wants to open and secure free trade agreements (FTAs). It did not join the Regional Comprehensive Economic Partnership (RCEP), a large Asia-Pacific trade pact, mainly because it feared China would misuse rules of origin to flood India with cheap goods, worsening its trade deficit,” said Wadhwa.
“Currently, India is seeking a review of its FTA provisions with ASEAN and wants to join APEC.”
Foreign policy expert C Raja Mohan disagrees. He points out that India prioritizes national sovereignty and strategic autonomy over traditional multilateral cooperation frameworks.
“India’s current strategic focus is on forging bilateral trade agreements with the US, EU and Canada, reflecting a preference for leveraging its core strengths and regional domain rather than engaging in multilateral institutions like APEC,” Mohan told DW.
“New Delhi has already worked out trade deals with Australia and Britain.”
APEC is a forum for economic cooperation of all countries bordering the Pacific. It was set up in 1989 in response to the economic rise of Asian countries – Image: Seung-il Ryu/NurPhoto/IMAGO
Trump’s pivot makes multilateralism less appealing for India
Mohan said India’s approach is heavily influenced by the current geopolitical landscape shaped by the Trump administration, which pursues a bilateral and transactional approach to foreign policy.
“Consequently, multilateral platforms such as APEC or the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) are perceived as having diminished relevance or competitive heft for India in this context.”
The CPTPP is a free trade agreement between 12 countries in the Indo-Pacific region, consisting of Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United Kingdom and Vietnam.
Gulshan Sachdeva, from the Center for European Studies at Delhi’s Jawaharlal Nehru University, said that although Trump’s approach to trade policy seriously undermines existing global trade rules and disrupts the economic calculations of all major economies, including India, New Delhi’s own hesitancy in working with regional forums is also a factor.
“India’s reluctant participation in the emerging Asian economic architecture, including its last-minute withdrawal from the RCEP, may hinder its long-term integration into Asia-Pacific value chains,” Sachdeva told DW.
India’s stalled APEC bid
Unless APEC decides to expand its membership, India’s inclusion remains largely an academic discussion, according to Harsh Pant, head of the Strategic Studies Program at Observer Research Foundation (ORF), a New Delhi think tank.
In his reckoning, even though India has long sought membership in APEC, internal divisions within the group have stalled the process for a considerable time.
Sachdeva agrees, highlighting APEC’s internal decision-making process as well as “India’s cautious approach to economic liberalization” as significant stumbling blocks.
And while India is not a part of APEC, it does have close political, economic, and strategic ties with many of its members.
“Many Indo-Pacific economies, including ASEAN states, Australia, and Japan, are strengthening bilateral ties with India. India, once seen as protectionist, is shifting to pursue bilateral free trade agreements with like-minded countries,” said Pant.
(DW.com/NAN 31-10-25)
You might also like:
CARIBBEAN: Hurricane Melissa weakens to Category 1 storm over Bahamas – At least 25 dead in Haiti
Hurricane Melissa weakened to a Category 1 storm as it begins to batter Bahamas after pummeling Cuba and Jamaica. Melissa was downgraded to a Category 1 storm on Wednesday afternoon but is still predicted to bring a dangerous storm surge. “Hurricane weiterlesen…
