South Korea hosted the two-day 2025 Asia-Pacific Economic Cooperation (APEC) summit, in Gyeongju amid an insecure economic environment following the US imposition of tariffs in April. Twenty-one member states participated in the summit, which concluded last month, notably including the United States, Japan, China, and Russia. Although the meeting was intended to foster regional economic cooperation, developments in bilateral relations overshadowed the regional agenda.
South Korea Resets Relations with the US and Engages with China
The APEC summit provided an opportunity for South Korean president Lee Jae Myung to push for his top priorities with key regional players, such as finalizing tariff-reducing deals with the US and restarting positive relations with China. Moreover, speculation regarding a US-North Korean summit provided additional opportunities for South Korea to engage with China.
Amid questions about the future of the US-South Korean relationship under Presidents Donald Trump and Lee Jae Myung, the APEC summit concluded with both countries noting the strength of the alliance. After nearly seven months of negotiations, Seoul was able to successfully reduce the US-imposed tariff from 25 to 15 percent. Additionally, South Korea negotiated a $350-billion investment deal in two sections, with $150 billion focused on shipbuilding. Lee also received Washington’s support to develop nuclear-powered submarines, including fuel reprocessing. South Korea has had renewed interest in nuclear-powered submarines following the 2024 AUKUS deal.
Lee also prioritized strategic cooperation with China, despite its recent gray-zone tactics in the Yellow Sea, in hope of restarting dialogue with North Korea. This may prove challenging, as Kim Jong Un has abandoned unification as a long-term goal and enshrined North Korea’s nuclear status in the North Korean Constitution. The former Yoon Suk Yeol administration’s emphasis on defense and deterrence against Pyongyang also contributed to a fracture in communications between the two Koreas. With Seoul’s sights set on developing nuclear-powered submarines in cooperation with the US, it is possible that South Korea-Chinese relations will suffer further.
Japan’s New Leader Continues Progress with Seoul and Aggravates Beijing
Sanae Takaichi, Japan’s newly elected prime minister, sought to introduce herself and orient Japan’s priorities. Prior to the APEC summit, Takaichi met with Trump, where they solidified their cooperation on critical minerals and rare earths. The two leaders also discussed a number of Japanese companies interested in the $550-billion US investment package, focused on investment in advanced technologies, supply chain resilience, and US manufacturing and exports. The meeting ended with Trump’s comment that Takaichi “will be one of the great prime ministers,” a positive signal for the bilateral relationship.
Seoul and Tokyo looked to continue the momentum of their relationship following the resignation of Japan’s former prime minister, Shigeru Ishiba. Despite Lee’s concerns about Takaichi’s stance on South Korea’s historical grievances, both Lee and Takaichi agreed to a future-oriented relationship, confirming the continuation of “shuttle diplomacy” and trilateral cooperation with the US. However, days after the APEC summit, there have been South Korea-Japan tensions surrounding the Dokdo/Takeshima Island dispute.
Takaichi also looked to establish a positive relationship with China’s president, Xi Jinping. But despite the mutual promise to increase bilateral dialogue and cooperation, Takaichi’s recent comments about Japan’s potential involvement in a Taiwan contingency—restating Japan’s longstanding position—provided an opportunity for China to ratchet up its anti-Japanese nationalist rhetoric to rally support at home and internationally. As of mid-November, Bejing has advised citizens to avoid traveling to Japan, and the minister of defense has said that if Japan involves itself in a Taiwan contingency, “it will only suffer a crushing defeat…and pay a heavy price.”
For China, a First Meeting Between Xi and Lee, but the Trump-Xi Meeting Steals the Show
For the People’s Republic of China, the APEC summit provided an opportunity for Xi Jinping to portray his country as the global leader of an open trading system. His speech to the gathering spoke to China’s strengths in digital technologies, calling for a digital transformation of cross-border trade, and he urged a more inclusive approach to development.
The meeting between President Donald Trump and Xi Jinping on the eve of the summit overshadowed it, demonstrating the enduring importance of bilateralism in a more divided international community and highlighting the challenge of barriers to trade. The two leaders reached a temporary truce on tariffs and rare earths, and their meeting paved the way for a resumption of some US soybean sales to China.
Xi and South Korea’s Lee met for the first time, and this was Xi’s first visit to the country since 2014. The two leaders signed several economic agreements and committed to future high-level dialogues. Lee and Xi also discussed the denuclearization of the Korean peninsula, which the North Korean vice foreign minister denounced as a “pipe dream.” The Lee-Xi summit followed an uptick of diplomacy between Beijing and Pyongyang, which the Russia-North Korea alliance has appeared to eclipse.
For Xi, the most important aspect of this year’s APEC summit was China’s upcoming role as host in 2027. As Qiushi, the Chinese Communist Party journal, put it: “The highlight of this APEC meeting was the handover of the host country.” Next year the APEC summit will be held in Shenzhen, one of the first Chinese cities to open up to foreign trade in the 1980s. Its selection indicates China’s likely emphasis on an open Asia-Pacific community.
Russia Aims for Relevance Despite Isolation
The shadow of Ukraine pursued the Russian delegation to Gyeongju. Prior to the APEC summit, Canada, Australia, and New Zealand issued a joint statement condemning Russia’s full-scale war in Ukraine. Urging APEC to aim for consensus, South Korea followed APEC protocol by inviting President Vladimir Putin to the APEC meeting despite the International Criminal Court’s arrest warrant for the Russian leader on war crimes charges.
As South Korea is a state party to the Rome Statute establishing the International Criminal Court, Vice-Premier Alexei Overchuk represented Russia instead. In his speech to the gathering, he defended Russia’s war in Ukraine and highlighted how Russia’s connectivity projects fit with APEC’s agenda, especially in the energy sector, AI, and supply chain security.
Russia’s Ambassador to South Korea, Georgii Zinoviev, has referred to South Korea as the “friendliest of the unfriendly countries.” While admitting that the prospects for resuming pre-2022 cooperation between Seoul and Moscow in energy, infrastructure, and the Arctic remain “dim,” Russian Asia expert Andrei Zhubin points to some ongoing shared interests; for example the new South Korean government’s New Asia strategy dovetails with Russia’s emphasis on engaging the Global South. Despite the deepening Russia-North Korea military alliance and North Korea’s lack of interest in inter-Korean engagement, Zhubin emphasizes that the Lee administration’s pragmatic approach to the North resonates with Russia’s interest in supporting inter-Korean dialogue.
Multilateralism Takes a Back Seat
The 2025 APEC summit facilitated important bilateral engagements between key players in the Indo-Pacific. However, there were missed opportunities for trilateral engagement between heads of states, especially between the US, Japan, and South Korea. Although the summit was successful, concluding with the release of the Gyeongju Declaration on shared economic priorities, several unresolved issues could increase tensions in the region. Territorial disputes, North Korea’s military modernization, and coercive economic measures threaten cooperation between the APEC summit’s regional members.
