Trump tariffs expected to dampen global economic growth, OECD says

Global economic growth is expected to take a hit, in part as a result of President Donald Trump’s tariffs, if major nations remain mired in unresolved trade disputes, the Organization for Economic Cooperation and Development said in a report released Tuesday.

In the United States, GDP growth is projected to fall from 2.8% in 2024 to 1.6% in 2025 and 1.5% in 2026, according to the OECD, if the tariff rates imposed by Trump as of mid-May — the highest U.S. tariffs since 1938 — remain in place. GDP, the sum of all goods and services produced in the country, is the broadest measure of the economy.

The organization has also lowered its global economic growth forecasts for 2025, from 3.1% to 2.9%, with a smaller downward revision in 2026.

“Weakened economic prospects will be felt around the world, with almost no exception,” Álvaro Pereira, chief economist at the OECD, said in the report’s introduction, echoing grim forecasts from other organizations, including the International Monetary Fund, which warned last month of a “significant slowdown” in global economic growth.

The projections are far from certain, the report’s authors note, citing the unpredictability of trade policy in 2025. The challenges facing the global economy could be exacerbated by the imposition of additional trade barriers, or the risks could fade amid a cooling of international trade disputes.

The report does not reference Trump by name, though many of its findings revolve around bilateral tariff rate increases sparked by “Liberation Day” in April, when the Trump administration introduced substantial new taxes on imports. Some of those tariffs have since been delayed, negotiated down, challenged in court and, in some cases, increased. On May 28, the federal Court of International Trade in New York blocked the bulk of those initial tariffs, adding to the confusion surrounding their implementation.

The OECD analysis relies on the organization’s calculation that by mid-May, the Trump administration’s tariffs amounted to a 15.4% tax on imports — up from approximately 2% in 2024.

The report does offer some off-ramps to global economic slowdown.

“A reversal of the increase in trade barriers would support growth and reduce inflation, even if it did not immediately result in lower policy uncertainty,” it said. “Steps to ease regulatory burdens, and an early resolution to conflicts in Europe and the Middle East, could also improve confidence and incentives to invest.”