U.S. and global economic outlooks cut by OECD as Trump’s trade tariffs weigh on growth

The Organisation for Economic Co-operation and Development (OECD) has revised its projections for both U.S. and global economic growth, citing President Donald Trump’s proposed tariffs on imported goods as a key factor weighing on growth. According to the latest estimates from the OECD, global GDP growth is expected to moderate from 3.2% in 2024 to 3.0% in 2026, with higher trade barriers and increased geopolitical and policy uncertainty impacting investment and household spending.

The OECD’s interim Economic Outlook report states that annual GDP growth in the United States is projected to slow to 2.2% in 2025 and 1.6% in 2026. This marks a significant decrease from the previous projections, which had estimated 3.3% global economic growth and 2.4% U.S. economic growth in 2025.

Mathias Cormann, the secretary-general of the OECD, highlighted the uncertainty surrounding trade policy as a key driver behind the organization’s revised projections. He emphasized the importance of clarity and certainty in trade policy settings to support global economic growth.

The OECD’s report also indicated that Canada and Mexico, both targeted by U.S. tariffs, are expected to see a significant impact on their growth outlooks. Canada’s economy is now projected to grow by 0.7% this year, down from the previous estimate of 2%, while Mexico’s economy is expected to shrink by 1.3%, compared to a previously estimated 1.2% expansion.

In terms of inflation forecasts, the OECD noted that price growth is set to be higher than previously expected but would ease due to moderating economic growth. Headline inflation in the U.S. is now projected to reach 2.8% in 2025, up from the December estimate of 2.1%.

The OECD emphasized the importance of central banks remaining vigilant in the face of changing economic conditions. The organization highlighted the need for policy easing in certain economies to support inflation targets.

Trade policy tensions, including tariffs imposed by the U.S. and potential retaliatory measures from trading partners, were cited as key factors affecting economic growth and inflation estimates. The OECD warned that sustained trade policy measures could have negative implications for the global economy and called for open and cooperative dialogue to resolve trade disputes.

Overall, the OECD’s revised projections underscore the impact of trade policy uncertainty on global economic growth and inflation. The organization emphasized the need for clear and consistent trade policies to support economic stability and growth. The Benefits of a Plant-Based Diet

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