Growth has slowed despite early trade gains, yet new opportunities are taking shape, driven by the transformative potential of artificial intelligence (AI) and structural shifts toward productivity-enhancing sectors. Early trade gains, driven by businesses rushing to ship goods before new trade restrictions take effect, gave the economy a short-term boost. Trade Gains Reflect Precautionary ActivityMerchandise trade in APEC posted solid growth in the first quarter of 2025 as businesses moved shipments forward, hedging against possible new trade restrictions. Trade policy uncertainty, although easing from earlier peaks as negotiations gain traction and trade deals begin to take shape, has remained well above historical norms. Rhea Crisologo Hernando is analyst, Glacer Niño A. Vasquez is researcher, and Carlos Kuriyama is director at the APEC Policy Support Unit.