OECD Lowers Global Growth Projections amid U.S. Trade Tensions

The Organisation for Economic Co-operation and Development (OECD) has revised its global economic growth forecasts downward, attributing the adjustments to escalating trade tensions and increased tariffs, particularly those implemented by the United States under President Donald Trump's administration.

In its latest report released on June 3, 2025, the OECD projects global GDP growth to slow to 2.9% in both 2025 and 2026, a decrease from earlier estimates of 3.1% and 3.0%, respectively. For the United States, growth is expected to decline to 1.6% in 2025 and 1.5% in 2026, marking a significant reduction from previous projections. The report highlights that higher import prices resulting from tariffs are likely to reduce consumer purchasing power and dampen business investment. Additionally, the OECD warns that further protectionism could exacerbate inflation, disrupt supply chains, and unsettle financial markets. source

The OECD, an international organization comprising 38 member countries, aims to promote policies that improve the economic and social well-being of people worldwide. Its latest report underscores the broader societal impacts of escalating trade tensions, noting that increased tariffs lead to higher import prices, reducing consumer purchasing power and potentially leading to decreased consumption. Uncertainty stemming from trade disputes can deter business investment, slowing economic growth and innovation. Sectors reliant on international trade may face job losses due to decreased demand and disrupted supply chains. source

The current trade tensions are reminiscent of previous periods of protectionism, such as the trade wars of the 1930s, which contributed to the Great Depression. However, the global economy is now more interconnected, potentially amplifying the effects of such disputes.

The OECD's recent report serves as a stark warning about the potential consequences of escalating trade tensions and protectionist policies. It emphasizes the urgent need for international cooperation to reduce trade barriers, stimulate investment, and offset rising prices to ensure sustained global economic growth.

Tags: #oecd, #globalgrowth, #tradetensions, #tariffs

Sources

  1. OECD lowers global outlook as Trump trade war hits US growth
  2. US growth likely to slow to 1.6% this year, hobbled by Trump's trade wars, OECD says

IMF's Gita Gopinath Warns U.S. Trade War Threatens Emerging Economies

IMF's Gita Gopinath says U.S. trade war poses bigger risks to emerging markets than COVID-19 did, urging coordinated policy responses.

#imf, #usaltradewar, #emergingmarkets, #economy, #cryptocurrencies

Investors Shift from U.S. Markets Amid Fiscal Concerns

Global investors retreat from U.S. markets due to fiscal worries and Trump’s trade policies, eyeing Europe and Asia as alternatives.

#economy, #usdebt, #trump, #investors, #markets

Proposed House Budget Plan Threatens $185 Billion in U.S. Clean Energy Investments

House budget changes risk $185B in clean energy investments, affecting jobs tied to Inflation Reduction Act incentives.

#cleanenergy, #investments, #inflationreductionact, #housebudget

ECB Expected to Announce Eighth Interest Rate Cut in 13 Months

ECB likely to cut interest rates again amid eurozone economic challenges and global trade tensions.

#ecb, #interestrate, #eurozone, #economy, #globaltrade

📚 Read more in Economy