OCTOBER 29 — The upcoming Asia‑Pacific Economic Cooperation (Apec) summit offers an unexpected but timely opportunity for United States-China trade relations to break through a longstanding impasse. 

After months of deadlock and escalating tariff threats, recent signals hint at a thaw. The groundwork is ripe for a pragmatic reset—not because deep structural issues have vanished, but because both capitals recognise the cost of perpetual stalemate.

The crucible of stalemate

Over the past year, Washington and Beijing have traded tariff hikes, rare-earth export restrictions and deepening distrust. China’s tighter controls on critical minerals and the US’s stronger export curbs underscore how trade relations have morphed into national-security theatre.  

At the same time, the Apec Summit has sounded the alarm on slowing regional trade growth, warning that renewed protectionism could deepen the malaise across the Pacific Rim. 

Both parties now face the strategic reality that continued friction imposes mounting costs: disrupted supply chains, diminished innovation flows and erosion of influence in overlapping spheres of interest. Against this backdrop, the Apec summit becomes less a ceremonial event and more a potential launch-pad for recalibration.

Why a breakthrough matters

First, a trade detente between the US and China would relieve serious pressure on the regional economy. 

Apec member states—among them key Southeast Asian economies—depend on stable flows of capital, technology and demand for exports. The absence of a US–China truce introduces uncertainty that chills investment, reduces trade volumes and ultimately hampers growth. A positive move at Apec would signal to the region that risky decoupling need not be the only path.

Second, a breakthrough presents strategic dividends for both Washington and Beijing. For the US, renewed engagement reassures allies that American economic leadership remains active and constructive in the Indo-Pacific. 

For China, it offers a chance to demonstrate its willingness to cooperate on global trade governance, thereby enhancing its legitimacy—especially as it navigates ages of decoupling and regional contestation.

Third, for third-party states—such as those within Association of Southeast Asian Nations (Asean) or other pivotal powers—the emergence of US–China—stability creates policy space. Rather than being forced into binary camps, these states can exploit the interplay between Washington and Beijing for economic as well as diplomatic flexibility. In short, the region benefits if the central relationship improves.

Indicators of a shift

Recent reports suggest that US and Chinese negotiators have made the most meaningful trade progress in months, including on rare-earths and tariffs, ahead of the summit.  Preparatory high-level calls between senior representatives in both capitals also signal that both sides intend to meet fully prepared.  

Meanwhile, Apec organisers highlight that a meeting between Donald Trump and Xi Jinping is likely, which alone raises expectations of a substantive joint statement. 

These converging signals suggest that both countries perceive mutual advantage in near-term progress. The institutional context of Apec—less formal than a full free-trade negotiation—provides a useful “venue of convenience” for symbolic but meaningful commitment, which in turn can build momentum.

What a breakthrough could look like

A meaningful outcome at Apec might include:

A broad joint statement committed to stabilising bilateral tariffs and non-tariff barriers.

Publication of a shared roadmap on key sectors (e.g., advanced manufacturing, rare-earth minerals, semiconductors) with mechanism for consultative review.

Confidence-building measures: reinstatement of trade-dialogue tracks, data-exchange frameworks, limited rollback of export controls.

A signal to third parties that US–China trade competition can shift toward managed risk rather than open confrontation.

While such outcomes would stop short of a full-blown trade deal, they would represent notable progress and set the stage for further constructive engagement.

The caveats/ structural constraints

Yet any celebration must be tempered by realism. The US and China continue to diverge fundamentally: the US operates a predominantly consumer-and-services-driven economy, while China remains export-and investment-led, with significant state involvement.  Moreover, the domestic politics on both sides amplify rigidity: industrial lobbies in the US, national-security hawks in China.

There is also the risk of mis-framing progress as full resolution. A “breakthrough” may simply amount to managed tension rather than transformed relations. Sustaining a shift will require follow-through—monitoring, institutionalisation and credible enforcement mechanisms.

Implications for Malaysia and Asean

For Malaysia and the region, a US–China trade de-escalation permits renewed attention to growth-driving agendas rather than defensive trade hedging. States like Malaysia, which straddle between competing major powers, can recalibrate their economic diplomacy with less fear of collateral damage. In particular, Malaysia’s industrial strategy — including upgrading its role in regional value chains — stands to benefit if global trade begins to flow more predictably.

In Asean’s context, this moment underscores the bloc’s potential as a bridge rather than a battleground. A constructive US–China outcome enhances Asean’s relevance. It elevates the region’s role not just as a venue, but as a strategic actor, capable of leveraging great-power interests for regional development rather than being sidelined by them.

Conclusion

The Apec summit offers more than photo-opportunity diplomacy; it provides a turning point. If the US and China can signal meaningful trade engagement without waiting for perfect conditions, they open a pathway toward greater stability in the broader Indo-Pacific. For the region, and for middle-power states, that is a welcome development. While structural challenges persist and long-term work lies ahead, this moment matters: not because it resolves all conflict, but because it shifts the tenor of competition towards cooperation.

Malaysia and Asean should watch closely, lean in where appropriate, but also preserve agency. The era of zero-sum logic between Washington and Beijing is giving way, slowly, to a more nuanced phase—and the decisions taken at Apec may mark the opening act.

* Phar Kim Beng, PhD is the Professor of Asean Studies at International Islamic University of Malaysia and Director of Institute of International and Asean Studies (IINTAS).

** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.