Trump Tariffs: Global Growth Warning – OECD
- Global economic growth is projected to slow this year,largely due to the impact of tariffs imposed by former U.S.
- The OECD attributed the downgrade to a "significant" increase in trade barriers, cautioning that these "weakened economic prospects will be felt around the world." The organization highlighted the...
- economy this year, from 2.2% to 1.6%, and anticipates further slowing in 2026.
The OECD warns of a global growth slowdown, slashing its forecast to 2.9% due to Trump tariffs,creating “meaningful” trade barriers worldwide. The U.S.economy faces a concerning cut to 1.6% growth,with rising inflation risks. the UK isn’t spared, with predictions also trimmed amid mounting economic uncertainty. The report urges the UK to reinforce its public finances. The downgrade stems from heightened trade tensions and the unpredictable nature of recent policy changes, according to the OECD. News Directory 3 provides breaking coverage and analysis on these shifting global economics, and the challenges ahead. As the global landscape evolves, what financial strategies are being considered? Discover what’s next…
OECD Downgrades Global Growth Forecast,Citing Trump Tariffs
Updated June 03,2025
Global economic growth is projected to slow this year,largely due to the impact of tariffs imposed by former U.S. President Donald Trump, according to the Organization for Economic Co-operation and Advancement (OECD). The international policy group now expects worldwide growth to reach only 2.9%, a decrease from its previous estimate of 3.1%.
The OECD attributed the downgrade to a “significant” increase in trade barriers, cautioning that these “weakened economic prospects will be felt around the world.” The organization highlighted the uncertainty created by Trump’s approach to implementing tariffs as a key factor.
The group also reduced its forecast for the U.S. economy this year, from 2.2% to 1.6%, and anticipates further slowing in 2026. The OECD warned that the U.S. faces the risk of rising inflation, a trend that contradicts promises made during Trump’s presidential campaign.
The OECD also trimmed its expectations for UK growth this year to 1.3%, down from 1.4% predicted in March.The UK economy is forecast to expand by 1% in 2026, compared to the earlier projection of 1.2%. The OECD noted that UK growth, like that of other nations, would be ”dampened by heightened trade tensions” and “elevated uncertainty.”
Britain faces specific challenges, including substantial government debt interest payments against a “very thin” financial buffer, the OECD said.Chancellor Rachel Reeves previously announced measures to restore headroom against fiscal rules.
“We are forecasting basically a downgrade for almost everybody,” Alvaro Pereira, the OECD’s chief economist, told the BBC. “We’ll have a lot less growth and job creation than we had forecasted in the past.”
The OECD emphasized that “strengthening the public finances remains a priority” for the UK, “by delivering on the government’s aspiring fiscal plans, including through the upcoming Spending Review.”
While recent figures showed UK economic growth strengthening to 0.7% in the first three months of the year, the OECD cautioned that ”momentum is weakening, with business sentiment rapidly deteriorating” and “consumer confidence remains depressed.”
What’s next
Reeves is scheduled to outline her Spending Review next week, where she will face arduous decisions regarding the allocation of departmental budgets, with significant commitments already made to defense and the NHS.
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