OECD Warns U.S. Tariffs Slowing Global Growth, Raising Inflation

The OECD has downgraded its global economic growth forecasts due to the impact of higher U.S. tariffs, predicting a slowdown from 3.3% to 3.1% this year and further declines in subsequent years. The U.S. economy is expected to grow by 2.2% in 2025 and 1.6% in 2026, down from previous estimates of 2.4% and 2.1%, while Mexico's economy is projected to contract by 1.3% this year and 0.6% next. Canada also faces a significant reduction in growth forecasts, now expected to be only 0.7% for both 2025 and 2026. The OECD highlighted that trade uncertainties and geopolitical tensions are exacerbating the economic challenges, urging governments to address these issues cooperatively. The report also noted that while the Eurozone will experience some downgrades, it is less directly affected compared to North America. Overall, the increases in tariffs are anticipated to drive inflation higher and hinder business investment globally.