The 2025 Asia-Pacific Economic Cooperation (APEC) summit in South Korea is set to be a pivotal moment for global trade, as US President Donald Trump’s protectionist policies clash dramatically with the forum’s founding principles of free trade. All eyes are on the highly anticipated bilateral meeting between Trump and Chinese leader Xi Jinping, a critical discussion expected to define the trajectory of their intensifying trade war and the broader international economic order, leaving host South Korea in a complex diplomatic position.
This week, South Korea is hosting leaders from major Pacific Rim economies for the annual Asia-Pacific Economic Cooperation (APEC) summit. Historically, APEC has been a staunch champion of free trade and economic cooperation. However, the 2025 meetings are unfolding against a dramatically altered global landscape, largely shaped by US President Donald Trump’s sweeping tariffs and unilateral trade measures, which continue to send shock waves across the world.
The multilateral gathering in Gyeongju is expected to be significantly influenced by a critical sideline event: a face-to-face meeting on Thursday between Trump and Chinese leader Xi Jinping. This highly anticipated bilateral discussion, their first since Trump began his second term, takes place amidst an intensifying trade war, forcing South Korean hosts into a difficult balancing act.
The Evolution of APEC: From Free Trade Champion to Global Dialogue Platform
Established in 1989 as a 12-member forum, APEC’s initial mission was clear: to promote free trade and economic cooperation across the Asia-Pacific region. Over the decades, it has expanded to 21 members, including economic powerhouses like the United States, China, Japan, Australia, Russia, and host South Korea. These members collectively represent a significant economic force, accounting for 37% of the world’s population and more than half of global trade in goods as of 2024, according to South Korean government data. For more on APEC’s achievements and benefits, you can visit the official APEC website.
APEC’s strength lies in its ability to bring together diverse economies for dialogue on trade and economic issues, despite its lack of a military component or binding agreements. In past years, the forum has been credited by economists with successfully helping reduce tariffs and other trade barriers. However, the current atmosphere is markedly different, as noted by Kim Tae-hyung, a professor at Seoul’s Soongsil University. He observes that while APEC has always held symbolic significance, “the atmosphere is completely different this year and we might not see the usual range of discussions or topics that were often addressed at the forum.”
South Korea’s Delicate Balancing Act in a New Trade Landscape
Having last chaired APEC in 2005, during the zenith of postwar globalization, South Korea now faces a considerably more complex challenge as host in 2025. The global trade landscape has been profoundly transformed since President Trump’s return to the White House. The forum, once largely shaped by the United States and its allies in promoting multilateralism, now confronts a stark contrast under an administration characterized by steep tariffs and unilateral trade measures that have shaken even its closest allies.
Park Won Gon, a professor at Seoul’s Ewha Womans University, highlights this shift, stating, “The United States drove the launching of APEC with the goal of expanding global cooperation under a rules-based international order, but now, the Trump administration is precisely rejecting all of that.” This situation places pro-American members, particularly host South Korea, in a difficult position. They must carefully calibrate their diplomatic and public messages to advocate for free trade without alienating Washington, while simultaneously preventing China from positioning itself as the sole defender of the global order.
The Trump-Xi Meeting: A High-Stakes Encounter Amidst Escalating Trade War
The most anticipated event of the summit is Thursday’s bilateral meeting in Busan between President Trump and President Xi Jinping. This will be their first direct interaction since Trump began his second term, and it comes at a critical juncture in the escalating trade war between their two nations. Washington has intensified pressure with high tariffs and tightened technology controls, while Beijing has retaliated with measures such as curbs on rare earth shipments, a key source of Chinese leverage. This ongoing trade conflict has significant implications for global supply chains and economic stability, as detailed in an Associated Press timeline of the US-China trade war.
There is uncertainty regarding whether either leader will be willing to make major concessions. However, Ban Kil Joo, a professor at South Korea’s National Diplomatic Academy, suggests that the meeting itself indicates a potential for de-escalation: “They likely wouldn’t meet if they weren’t confident about reaching some sort of agreement.” This sentiment underscores the high hopes for the meeting to at least ease tensions, even if substantial breakthroughs remain elusive.
Broader Implications and South Korea’s Vision for APEC’s Future
Beyond the US-China dynamics, South Korea is attempting to guide APEC towards discussions on other pressing global issues. South Korean Foreign Minister Cho Hyun has indicated that issuing a joint statement strongly endorsing free trade might be challenging given the members’ differing stances. Instead, he anticipates a broader declaration emphasizing peace and prosperity in the Pacific region.
Experts like Choi Yoon Jung, an analyst at Seoul’s Sejong Institute, propose that South Korea should leverage its chairmanship to convey a message from “middle power” nations, advocating for free trade and global cooperation rather than getting caught in the Washington-Beijing rivalry. Choi emphasizes APEC’s inherent strength in facilitating dialogue even among disputing nations, enabling “practical cooperative steps, even when there could be no immediate, substantial breakthroughs.”
The 2025 APEC meeting will also address emerging global challenges, underscoring a shift in the forum’s focus to remain relevant in a rapidly changing world:
- Rising Role of Artificial Intelligence (AI): The rapid advancement of AI presents both opportunities and regulatory challenges for the global community.
- Demographic Challenges: Developed economies face significant issues such as low birth rates and aging populations, which impact economic growth and social welfare.
Park Won Gon notes the importance of AI as a crucial global issue lacking regulatory norms. He suggests that technology-savvy South Korea could play a meaningful role in developing these essential standards for AI governance, further solidifying APEC’s evolving relevance beyond traditional trade discussions.
Bilateral Engagements Leading to the Summit
Ahead of his meeting with Xi, President Trump also held bilateral talks with South Korean President Lee Jae Myung in Gyeongju on Wednesday. His trip to South Korea followed a visit to Japan, where he met with the country’s new Prime Minister, Sanae Takaichi, who is also attending the APEC forum. Both Seoul and Tokyo have pledged substantial investments in the US, aiming to mitigate the impact of the Trump administration’s highest tariffs, which pose a significant threat to their vital auto industries and other major exports. However, Washington and Seoul have yet to finalize a deal, with South Korean officials rejecting US demands for upfront payments, fearing a potential financial crisis, and instead proposing loans and loan guarantees.
The 2025 APEC summit stands as a testament to the complexities of modern global diplomacy, where traditional economic cooperation intersects with new political realities, technological advancements, and demographic shifts. South Korea’s role as host is not just about facilitating dialogue, but about steering a crucial international forum through an era of profound transformation.
