From October 31 to November 1, leaders of the 21 Asia-Pacific Economic Cooperation (APEC) economies will meet in Gyeongju, South Korea, for the trade-focused forum’s annual summit. The summit comes amid unprecedented geopolitical turmoil that is prompting key U.S. allies and partners to reexamine their economic dependencies within a context increasingly defined by economic security. The U.S. Chamber Asia Program is investigating these shifting outlooks in Tokyo, Seoul, Taipei, Singapore, and elsewhere to better advise member companies on how longstanding assumptions and the “rules-based order” are changing, what may come next, and what that means for business.
While the international security environment is fraught with uncertainty, key drivers in the trade and economic realm include both China’s growth and increasing influence and the United States’ dramatic departure from its traditional trade policies, with simultaneous technology advances adding to the urgency.
China’s Economic Might
China’s rise as a global economic powerhouse has been accompanied by concerns over its state-led economic model, industrial subsidies, and use of economic coercion. Its vast industrial overcapacity and trillion-dollar manufactured goods trade surplus can no longer be overlooked as waves of Chinese exports continue to reach global markets.
The United States has responded with tariffs, export controls, and investment restrictions aimed at countering China’s influence. Meanwhile, China is doubling down with global restrictions on its exports of rare earths and other critical minerals, restricting agricultural trade, and using its leverage in ways that have led to a downward spiral in the bilateral relationship.
In the weeks leading up to the APEC leaders’ summit, we have seen a volley of policy announcements and countermeasures from the United States and China on tariffs, export controls, and shipping and port fees, with major impacts on a wide range of goods from soybeans and rare earth minerals to software and cooking oil. A meeting between Presidents Donald Trump and Xi Jinping on the margins of APEC is set to occur, but a fundamental shift in the trajectory of U.S.-China relations seems an unlikely result.
Trans-Pacific Transformations
U.S. trade policy has seen significant changes in recent years; gone are the days of new, comprehensive, market-opening trade agreements with friends and allies. Recent U.S. administrations have shifted away from free enterprise and free markets to industrial policy and tariffs. The post-World War II consensus favoring increased U.S. market access in exchange for commitments to a global set of norms has been all but abandoned. The ongoing fragmentation of rules is leading governments to gradually abandon the Washington Consensus and its commitments to transparency, non-discrimination, and a level playing field for international companies.
What does this changing environment mean for the Asia-Pacific leaders the United States has long looked to as allies and partners? In discussions earlier this month on the margins of the 62nd Annual U.S.-Japan Business Conference in Tokyo, we heard from U.S. and Japanese business leaders, officials, and academics who were eager to express the importance of this moment and the unprecedented uncertainty facing the region.
An Alliance of Give-and-Take?
Among the plaintive questions we heard: What do we really mean when we talk about “like-minded” partners? Can U.S. and Japanese businesses build sufficient trust to develop scaled responses to China’s growth? If the United States will no longer participate in traditional trade agreements, is there a way to “back into” the content of pacts like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) via sector-focused agreements in select areas such as supply chain resilience and digital trade? Can the United States accept even the minor constraints that might accompany such agreements? Businesses typically focused on quarterly earnings agreed that a better understanding of the longer-term environment is now essential for operations.
The Chamber is committed to being a primary resource for our membership as we adjust to new realities and seek to impact the direction of these profound changes. In the coming months, the Chamber’s Asia program is conducting China Center meetings in Beijing, hosting meetings with APEC leaders in South Korea, engaging visiting academics from Singapore, planning the upcoming 36th Annual U.S.-Korea Joint Plenary, and much more. We also plan to take a member company delegation to Taipei to continue these discussions in the first quarter of 2026—a year that will see the United States preside over the G20 and China as APEC chair. We look forward to engaging deeply with member companies on these important issues now and over the coming years.
About the author
Charles Freeman
Charles Freeman, senior vice president for Asia at the U.S. Chamber of Commerce, has been helping companies navigate complex markets in the Asia-Pacific for 25 years. His career included senior stints in government, business, law, and academia, giving him a unique perspective on the challenges and opportunities in the world’s most dynamic region.